NEW DELHI: The Government on Thursday launched its disinvestment programme for the current financial year, allowing sale of 10 per cent shareholding in the `navaratna' public sector company Bharat Heavy Electricals Limited (BHEL), even as the Left parties strongly protested.

Finance Minister P. Chidambaram, who briefed newspersons after a meeting of the Cabinet Committee of Economic Affairs here, claimed that the Left parties had been consulted and the decision was taken in the "spirit" of the national common minimum programme (NCMP).

But the Left parties said the proposal was "directly contradictory" to the commitments made in it.

Both the Communist Party of India (Marxist) and the Communist Party of India called upon the United Progressive Alliance Government to reconsider the decision as it would spark widespread protest among the people.

CPI, CPI(M) statements

In similar statements here, they said the NCMP clearly stated that the Government would encourage and strengthen the `navaratnas' to become global players. It also categorically stated that the Government would not disinvest in or privatise profit-making public sector undertakings.

Mr. Chidambaram said the NCMP mandated that investment avenues be found for retail investors and for reviving PSUs. The latest decision on disinvestment met both requirements.

Funds for health

By selling 10 per cent equity in BHEL, the Government shareholding would fall from 67.72 to 57.72 per cent.

The funds raised from the divestment, estimated to reach Rs. 2,000 crores, would accrue to the newly-created National Investment Fund. Seventyfive per cent of the fund was meant to finance health and education schemes and the balance to support "revivable" public sector units. The proceeds would not be reflected in the Budget. The proposed offer on BHEL would be carried out through the book-building route.

The BHEL stock would be split in consultation with the Heavy Industry and Disinvestment departments to make the issue affordable to small retail investors. Out of the 10 per cent equity being disinvested, 15 per cent would be reserved for employees. Now BHEL shares were ruling at Rs. 896 each.

Modalities

Asked about the modalities of the issue, Mr. Chidambaram said the details would be decided after a lead manager was appointed. The process would largely be on the lines of the earlier issue by the National Thermal Power Corporation (NTPC).

The NTPC was the first public sector company the UPA Government disinvested in November last. It then divested 5.25 per cent of its stake along with the company's initial public offer of the same amount.

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