The Hindu Business Line : CPI (M) opposes NTPC divestment plan; says no problem with IPO

THE Government's plan to disinvest 5.25 per cent of its holding in National Thermal Power Corporation (NTPC) along with the proposed Initial Public Offering (IPO) of a similar percentage of shares is set to run into rough weather with the move likely to be opposed by the Left parties.

Providing an indication to the thinking of the Left, the CPI (M) Politburo member, Mr Prakash Karat, said that his party does not approve of the disinvestment move, though it has no quarrels with the IPO.

"The move to disinvest is neither warranted nor in the spirit of the Common Minimum Programme (CMP) of the UPA Government," Mr Karat said.

Though the Left is not a coalition partner in the UPA Government, the CMP had been drafted with their consent since they are providing outside support to the Government. The Left parties with its substantial numbers provide an important prop to the United Progressive Alliance (UPA) Government, with the CPI(M) having the lion's share of MPs among them.

Business Line had reported on Sunday last that the NTPC disinvestment plan had been initiated by the Department of Disinvestment which had written to the Ministry of Power for its inputs to initiate the process.

Mr Karat explained that his party does not have any problems with the IPO since the monies raised from the exercise would accrue to the company itself while the disinvestment proceeds would be aimed at bolstering the government's revenues.

"The disinvestment moves seems to be dictated by the Government's budgetary needs. We do not approve of it since we feel it is not necessary," Mr Karat said.

He pointed out that the CMP had clearly expressed itself against such divestment moves while it had left the door open for companies to raise resources through the public issue route. For this he quoted the relevant portion of the CMP that said, "The UPA will retain existing `navratna' companies in the public sector while these companies raise resources from the capital market."

The issue of public sector disinvestment had been one of the most hotly debated ones during the formation of the UPA Government soon after the recent general elections. Strong opposition to offloading of Government stake in public sector undertakings, specially the strong ones such as NTPC had subsequently led to the scrapping of the Ministry of Disinvestment.

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