Disinvestment in Nalco

Friday, June 23, 2006

Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

The Polit Bureau of the CPI(M) opposes the decision of the Cabinet Committee on Economic Affairs to disinvest 10 per cent of government equity in Nalco and Neyveli Lignite Corporation.

The Common Minimum Programme of the UPA had clearly stated that profit-making public sector companies will not be privatised or disinvested. The current decision is contrary to this spirit.

Further, such disinvestment only paves the way for a creeping privatisation through the backdoor. It must be remembered that on an earlier occasion, when over 12 per cent of Nalco was disinvested, the FIIs and Nalco’s competitor, Hindalco, bought over 4 per cent. Such developments are ominous for the future health of India’s public sector.

The argument forwarded that this disinvestment is being undertaken to raise resources for social sector investments is tenuous. The CPI(M) has already suggested various alternatives for resource mobilisation, including the mopping up of tax arrears and due, mainly corporate and income tax of over 1,17,000 crores. The sale of public assets is the wrong way to raise such resources.
The Polit Bureau of the CPI(M) calls upon the UPA government to reconsider this decision.