Saturday, 7 December 2019

Strategic Disinvestment Not in National Interest: Swadeshi Jagaran Manch

Updated: December 2, 2019 3:08 pm

Swadeshi Jagaran Manch, an affiliate of RSS has said that Strategic Disinvestment is not in National Interest. It is important to mention that SJM had recently organised a Rastriya Sabha in Haridwar from  29 November to 01 December 2019, where it was discussed.

“The strategic disinvestment of Public Sector Enterprises (PSEs) is not only an imprudent business decision, but is also against the national interest. It not only denies the people of India –the real owners of PSEs—the fair value of the assets and capital investments, but it also brings in unfair advantage for those who intend to buy. Swadeshi Jagran Manch (SJM) do believe that, the government has no business to be in business, but resist the plan to handover the national assets to corporate houses of multinational corporations (MNCs) at throw away prices,” SJM has said.

It has further added that there is a need for fair assessment of the PSEs –their potential, strategic need, turnaround probability, market utility—and then the disinvestment strategy is required. The strategic disinvestment of the national carrier Air India and oil marketing company BPCL at this hour is uncalled for. Air India requires restructuring and professional management, not disinvestment. These are not emotional positions, but a pure business requirement. Close scrutiny of Air India’s financial and other documents, reveals that the restructuring of Air India’s debts and assets can not only reduce the liabilities for the company but also spin the national carrier back into profits. A major chunk of the losses are because of the servicing of the debt. This debt is taken because of the bad decision making (with malafide intentions). It’s really painful and unfair to call Air India a bad asset. A developing country like, India needs the national carrier for strategic and market balancing requirements.

 

On  BPCL it says that the strategic disinvestment of BPCL is certainly not a good business decision. The second largest PSE oil marketing company is regularly reporting profits. The gross refining margins (GRM) of their refineries are matching the best in the global markets. What benefit a strategic investment will bring? The example of Hindustan Zinc’s profits multiplying multiple times after its privatization is a misfit. BPCL is already operating in liberalized environment and is a professionally run organization. From product pricing to operations are of the international standards. If government wants to reduce their equities, the best place to execute this is stock market. BPCL is in profits and is already giving the exchequer dividends. And at present the Indian stock markets are performing well. The stock market will not only give better value for the equities, but will also allow fair chance to smaller investors to take the benefits of good performance of BPCL. On the contrary, the rumors are; the Saudi Aramco is eyeing these assets. This is not only unacceptable but also dangerous. The asset created with the national sentiments and hard work shouldn’t land up in the lap of the foreign oil companies –who see these assets only as a statistic to swell their valuation. The ‘strategic’ sale shouldn’t turn out to be only ‘strategic’ buy for MNCs. BPCL will only be a loser in this deal.

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