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Emboldened George may seek more

BS Political Bureau in New Delhi

Having persuaded the government to put off the divestment of oil sector PSUs for the time being, Union Defence Minister George Fernandes is all set to exert more pressure on the government to have a re-look at the economic policies.

The deliberations at the two-hour informal meeting among senior ministers presided by Prime Minister Atal Bihari Vajpayee mark the beginning of a new phase in which Fernandes, in his capacity as the NDA convenor, will have a greater influence in fashioning the government's economic policies.

He will spell out his position on economic reform at two meetings where he will get the opportunity to address corporate houses - Ficci (Federation of Indian Chambers of Commerce and Industry) has invited him to speak at the anniversary of the Indo-US parliamentary forum on 10 September and he is to address CII (Confederation of Indian Industry) on Defence-Industry partnership: Taking Stock on 11 September. Fernandes will explain that questioning models of divestment should not be equated with an assault on economic reform.

However, Fernandes is not a man in hurry. Though he is expected to lie low for the time being, he is studying the events that have led to the crisis in IDBI and IFCI, jeopardising public money to the tune of thousands of crores (million) of rupees, sources close to him say. He is also studying the report of the SP Gupta report on unemployment and ways in which it can be implemented.

The Samata Party chief is keen to dispel the media and corporate impression that he is anti-reform. One of the suggestions he is considering is convening a meeting of diplomats, envoys and ambassadors to explain that his suggestion of review of economic policy should not be seen as swadeshi fundamentalism.

Even at the informal meeting on Saturday, Fernandes was at pains to explain his position. "The strategic sale of a particular company must not be linked with reform" Fernandes is believed to have remarked in response to the Union Divestment Minister Arun Shourie's view that deferment of Hindustan Petroleum and Bharat Petroleum divestment would be setback to economic reform. The meeting finally agreed that the global political climate - with Anglo American powers having signalled war on Iraq - was not conducive to oil divestment at this stage.

Significantly, Fernandes struck sympathetic chord even among BJP ministers including union petroleum minister Ram Naik and HRD Minister and Swadeshi ideologue Murli Manohar Joshi. Naik is believed to have asserted his point that the divestment of the BPCL and the HPCL would be detrimental to people's interests. "The dismantling of the administered price mechanism has not given any relief to people" Naik argued, sources say.

Taking the APM experience as a reference point, Naik harped on the theme that the divestment of the profit-earning oil PSUs would be politically counter-productive in view assembly elections to be held in ten states.

Sources close to Naik say that the petroleum minister also discussed several other ways, including divesting shares of IOC (Indian Oil), ONGC (Oil and Natural Gas Corporation) and Engineers India Limited to the public. According to him, this would meet at least 50 per cent of the money targetted to be earned through divestment.

Though the informal meeting discussed range of divestment issues, senior leaders expressed their concern over statements from ministers, giving an impression of "infighting and being ambushed" in the government. Government sources say that they also referred to a statement by Shourie who said that he was "being ambushed" by his Cabinet colleagues.

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