Chidambaram not on board in Opposition's divestment protest against govt

Former Finance Minister P Chidambaram greets the audience during his book launch 'Speaking Truth to Power' in Bengaluru | PTI Photo
The Opposition believes it can wage the next big political battle against the Narendra Modi government over its plans to divest stakes in public sector undertakings (PSUs). However, not everyone in its ranks, including leading lights like senior Congress leader P Chidambaram, is likely to agree.

On Tuesday, members of the Trinamool Congress (TMC) and Left parties protested in the Rajya Sabha on the issue of disinvestment. Their protests contributed to the House being unable to transact any business the entire day. Trinamool Congress leader Derek O’Brien said his party planned to continue its protests on the issue on Wednesday, as well.

In the post-lunch session, the Rajya Sabha was to take up a discussion on the Union Budget, with Chidambaram initiating it from the Opposition’s side,  but continuous disruptions forced the Chair to adjourn the proceedings for the day.

The TMC claimed it has the support of the Congress on the issue of disinvestment. But, Chidambaram supports disinvestment of stakes in PSUs and said as much while addressing a gathering at a Congress-affiliated think tank on Monday evening. The former Union finance minister, however, clarified that it was his personal view, and not that of his party’s.

In the Budget, Finance Minister Nirmala Sitharaman has set a disinvestment target of Rs 1.05 trillion for the current fiscal year. The NITI Aayog has also recommended disinvestment of 50 PSUs.

Addressing a gathering at the Rajiv Gandhi Institute of Contemporary Studies on Monday evening, Chidambaram backed the disinvestment plan. He said his personal view on divestment was that the government “has a right to be in business only in areas where there is a need for the government to be in business, where some public goods have to be produced in government-owned factories/companies”. He said that in all other cases, PSUs should be privatised. He said if the government wished to remain a shareholder, it can, but there is no reason why the government should continue to own and manage PSUs.

Chidambaram said the government owning and managing PSUs locks up wealth, which would get unlocked if privatised and eventually listed in the market. 

He said there is a difference between corporatisation and privatisation, and there was nothing wrong if the business is corporatised, but privatisation should meet some tests.

On the debt-ridden Bharat Sanchar Nigam (BSNL), Chidambaram said it was bound to collapse since it lacks the capital, technology and the nimble-footed management needed to survive in a highly competitive, highly technology-driven and obsolescence-affected industry like telecommunications. He said the example of Air India was nearly similar. Chidambaram said the fate of BSNL and Air India should have been anticipated, but said he was not blaming only the NDA government, and indicated how even the UPA was a “prisoner” of its past on the issue of disinvestment.

The Congress leader also backed consolidation of public sector banks. On the government’s plans to borrow from abroad, Chidambaram said it was nothing new as there were examples of quasi-sovereign borrowings in the past, including ‘resurgent India bonds’ and ‘India millennial bonds’.

Chidambaram said he neither saw any difficulty nor harm in the government borrowing from abroad as long as it was in “prudent” limits. 

 
He suggested the government should provide for the hedging cost, but said it might still get better rates than the domestic market.