India to privatise state-run power companies
Pallab Bhattacharya, New Delhi
Notwithstanding reservations by Left parties, which provide it with key outside support, the Indian government revived its plan to privatise three key state-owned power-generating companies to raise money for National Investment Fund for social sector projects.A meeting of the Indian cabinet on Thursday decided to ride piggyback on initial public offerings (IPOs) of Rural Electrification Corporation, Power Grid Corporation of India and National Hydroelectric Power Corporation to raise Rs1500 crore to mobilise fund, Finance Minister Palaniappan Chidambaram told reporters here. The government had in July last year put on the backburner a plan to disinvest two key public sector undertakings following strong objections from Left parties and trade unions controlled by them. Asked if riding piggyback of IPOs of the three state-owned power companies would be seen as revival of the privatisation programme, a key economic reform measure, Chidambaram said "this is not stand-alone disinvestments". He said External Affairs Minister Pranab Mukherjee had discussed with the leaders of CPI (M) the issue of disinvestments of the three power corporations, riding on a portion of the money derived from their IPOs. However, CPI (M) General Secretary Prakash Karat said Thursday the move was 'uncalled for' and asked the government to halt the process. Chidambaram said if the disinvestment through IPO route goes through, it would not amount to total privatisation and only the government's holdings in the three power companies would come down.
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