EAS Sarma Urges Presidential Review of IDBI Disinvestment
Former government secretary EAS Sarma calls for a review of the disinvestment of IDBI Bank, citing concerns over public welfare.
EAS Sarma has written to the President of India requesting a review of IDBI's disinvestment.
IDBI Bank, established in 1964, employs over 19,000 people and plays a crucial role in public welfare.
Concerns have been raised about the transparency and legality of the disinvestment process.
EAS Sarma, a former secretary to the government, has formally requested the President of India to intervene in the disinvestment of IDBI Bank, arguing that the social costs outweigh the perceived benefits. In his letter, Sarma emphasized that the President, who holds equity shares in Central Public Sector Enterprises (CPSEs) on behalf of the public, should direct the government to reassess the disinvestment process, particularly concerning IDBI.
The context of Sarma's plea highlights the significant role of CPSEs in the economy, with 475 enterprises employing over 781,000 individuals and generating substantial profits. Sarma pointed out that the President's equity holdings amount to ₹4,50,740 crore, yielding dividends of ₹1,38,503 crore annually. He advocates for an independent inquiry into the legality of IDBI's disinvestment, suggesting that findings should be presented to Parliament for further discussion.
Sarma criticized the government's aggressive privatization strategy, arguing that the rationale for raising fiscal resources through disinvestment is flawed. He contended that private firms often borrow from the same national savings pool that the government can access more favorably, and questioned the assumption that privatization leads to better management. He noted that many CPSEs have effectively competed on a global scale.
The implications of disinvesting IDBI extend beyond financial considerations, as the bank has been a key player in promoting self-reliance in strategic sectors. Sarma warned that the current disinvestment model restricts competition by excluding other CPSEs from the bidding process, leading to what he termed the 'underselling' of public assets. He argued that privatization undermines the public purpose for which lands were originally acquired, as they were designated for government-owned entities.
Looking ahead, Sarma's call for a review of the IDBI disinvestment highlights the need for transparency and public involvement in such significant decisions. He urged the government to reconsider its approach and ensure that the interests of the public and employees are prioritized in any future disinvestment strategies.
