Divestment Minister Arun Shourie said a separate disinvestment fund would be created by the finance ministry, possibly in the forthcoming Budget, to enable the government to utilise the proceeds of divestment for a specific purpose.
He also said Indian Oil, GAIL India Ltd and Oil and Natural Gas Corporation would not be divested because these were considered strategic. The government will continue to control them.
However, in entities like Videsh Sanchar Nigam Ltd, the government will not interfere in routine functioning of the divested public sector undertaking. He was speaking during question hour in the Lok Sabha and later replying to a discussion in the Rajya Sabha.
Referring to apprehensions expressed by Pranab Mukherjee, deputy leader of the Congress in the Rajya Sabha, that the proceeds from the disinvestment would be used for bridging the fiscal gap, Shourie said the government would create a separate fund to monitor the "utilisation" of money received through sale of public sector undertakings.
Accepting that the "concerns" expressed by MPs in the Rajya Sabha were "genuine", he said their suggestion that the proceeds should not go to the Consolidated Fund of India would be addressed.
However, the minister faced the ire of both Houses when he tried to justify the disinvestment of Hindustan Petroleum Corporation Ltd without seeking parliamentary approval as demanded by the Congress and the CPI(M) members and accepting Attorney-General Soli Sorabjee's opinion instead as the basis of the sell-off.
"Let the attorney-general come and explain his opinion in the House," members demanded in both Houses.
Shourie told the House there were no differences in the Cabinet over divestment of oil companies, pointing out that the matter was discussed over 11 months. He said the shareholders' agreement had been designed to accommodate everyone's reservations.
In the VSNL disinvestment for instance, the views of security agencies were incorporated in the sharepurchase agreement.
Shourie also said there were several other corporate curbs on formation of post-disinvestment monopolies . The Competition Act was designed to curb entities that were in the slightest bit anti-competition.
There were laws against creeping acquisition.Under the Securities and Exchange Board of India rules, if the strategic partner wanted more than a certain percentage of the shares, he had to give a 20 per cent open offer.
And the board governing disinvested oil companies had wide and overarching powers governing all aspects of the functioning of the oil sector PSUs, he added.
However, Shourie disagreed with the Opposition members that the disinvestment of PSUs had caused hardship to workers. "Their wages have gone up 15 to 30 per cent," the minister said.
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