Advance Tax, State Loans To Drain Rs 8,000 Cr

The Congress yesterday said the government was resorting to distress sale of blue-chip PSU shares at very low prices, in order to meet the divestment target of Rs 8,000 crore.

Charging the National Democratic Alliance (NDA) government with "irresponsible attitude and cavalier approach" towards the public sector, Jairam Ramesh, secretary in the Congress' economic affairs department, cited the sale Gas Authority of India Ltd (GAIL) shares to Enron and British Gas for Rs 70 a share as example.

He refused to call it a scam, but alleged "lack of transparency" in the divestment programme for the oil sector, particularly the government's move to sell IPCL shares without putting a proper competition policy in place.

Ramesh said the government permitted sale of GAIL shares to foreign investors at an "atrociously low" price of Rs 70 a share, despite knowing that the United Front government had refused a price of around Rs 120 a share.

He charged the government with allowing GAIL's competitors like British Gas and Enron a back-door entry into the company at a throw-away price.

Investors and merchant bankers had informed the government that GAIL shares could bring in anywhere between Rs 300 and Rs 350 a share, but the government agreed to the sale in order to fit the disinvestment in its 100-day economic programme.

He said the P V Narasimha Rao-led Congress government had withdrawn its divestment programme mid-way in the case of Videsh Sanchar Nigam Ltd because the price being offered was lower than expected.