They are under pressure to rethink on the much-touted PSU disinvestment programme from a rather unexpected quarter, Trinamool Congress, an important member of the reconstituted post-poll United Progressive Alliance (UPA). Even DMK, another UPA constituent, is said to be in favour of a cautious approach on the contentious issue of PSU disinvestment and financial sector reform.

Trinamool's latest political stand on disinvestment beats even its arch rival, CPI(M)'s position on the issue. In the previous UPA government, the PSU disinvestment programmes acted as a constant irritant between the then Finance Minister, P. Chidambaram, and the Left group led by CPI(M) general secretary, Prakash Karat, until the political confrontation between the UPA and the Left over the Indo-US civilian nuclear co-operation deal temporarily overshadowed the PSU disinvestment issue. The Left, though diminished in strength in the new Lok Sabha, continues to resist the government's disinvestment programme and foreign direct investment (FDI) in strategic sectors of economy.

Obviously, the Prime Minister and the Congress president, Sonia Gandhi, and their inner circle are against doing anything at this stage to rub the Trinamool supremo, Mamata Banerjee, on the wrong side. Till now, Mamata has been most cooperative with the Congress leadership in terms of sharing power and positions in the government. Smaller parties like DMK and Sharad Pawar's Nationalist Congress Party (NCP) have bigger and higher level representation in the government in proportion of their number of MPs sitting in the UPA. Mamata's message to the Congress bigwigs is clear: no privatisation of high-performing PSUs, no shut-down of sick PSUs if they can be revived, no bank denationalisation or back-door sale of PSU bank and financial institution shares. Both the Prime Minister and the Finance Minister have promised to examine her demands seriously before taking any decision on these matters by the government and the concerned ministries.

The Prime Minister is believed to have issued a directive to his Cabinet colleagues that they would not take any policy decision on disinvestment of their departmental undertakings or on any key economic issues such as deregulation of price and distribution controls of sensitive items of mass consumption without the clearance of the Union Cabinet. These ministers are also not supposed to air their personal views on the subject before the public or the media until the matter is cleared by the Cabinet. Insiders say the directive has already upset some of the economic ministries, including petroleum and national gas and civil aviation, which are all geared up to take further reform measures to cut government subsidies and raise additional finances for their departmental undertakings.

The proposed disinvestment in Air India is certainly off, at least for the time being. The earlier talked-about subsidy roll-back for petroleum products is also stalled for now. The change of portfolios of some of the key UPA ministers in the previous government for lesser responsibilities in the new administration has clearly demonstrated the Prime Minister's newly acquired strength and resolve to run the affairs of the nation without much bias and prejudice. He has chosen a strong but low-profile Finance Minister, a political veteran, and a feet-on-the ground Home Minister, who are firmly on his side.

Frankly speaking, the ministerial-level moves such as to deregulate the oil price and the proposed stake sale in Air India are not in the interest of the public. Moreover, the implementation of such controversial proposals could lead the government into a big trouble at the very beginning of what otherwise looks like a smooth five-year innings. They also have the potential to explode into a big financial and political scandal at some point of time since such moves will immensely benefit certain highly influential private sector players in the respective industries. Air India is not even a profit-making enterprise. It is unable to pay wages to its employees from the company's clear earnings. A stake sale in the company will mean a distress sale of the national flag carrier. The biggest beneficiary of such a situation will be the big private sector rivals such as Jet and Kingfisher, both managed by non-resident Indians (NRIs). The mindless merger between the erstwhile Indian Airlines and Air-India has, instead of turning the amalgamated entity into a huge international civil aviation conglomerate, already pushed the new company into the third position among the domestic airlines.

Reports suggest that the PSU disinvestment target for the current fiscal could be as low as Rs. 6,500 crore as against an easy potential of nearly Rs. 50,000 crore if the government took up stake sale in some of the top-performing companies such as IOC, BHEL, NTPC, SAIL and GAIL. Among the PSUs in which the government may go for stake sale now are Oil India Limited and National Hydroelectric Power Corporation. It is unlikely that Mamata will resist the government's disinvestment programme in such low-profile public enterprises. Ministerial initiatives to immediately lower government stakes in BSNL, Air India, Coal India and the National Aviation Company are out. They may have to be kept in cold storage to be taken up at an opportune time, in the future.

For anyone who is familiar with Mamata's past and fully posted with the latest on her present political allies in West Bengal, the Trinamool supremo's pro-public sector rhetoric would appear to be indispensable for her pro-people image. Contributing to this image, which made here extremely popular among poor farmers, marginal land-holders, adivasis and daily wage earners in generally impoverished, infrastructurally-weak West Bengal are some of the ultra-leftist parties and groups such as the Socialist Unity Centre (SUC), CPI-ML, Naxalites, Maoists and NGOs for protection of human rights. The SUC, supported by Trinamool, has sent its first member to Parliament.

Most of these Trinamool allies are allergic to large business houses, multi-national corporations and privatisation of public enterprises. Mamata is also projected as a staunch secularist. She is seen as a more genuine and serious Marxist than the CPI(M). She is also seen as more pro-Muslim and pro-poor than both the CPI(M) and Congress put together. Mamata can't shed this hard-earned image before her new allies and supporters, who can help her break the CPI(M)'s stranglehold on West Bengal and seize the state's administration from the clutches of her arch rival, Buddhadeb Bhattacharyya. Her goal is the occupation of the Writers Buildings, the seat of administrative power in West Bengal. Manmohan Singh and Pranab Mukherjee know that Mamata is not going to compromise on her local image and political ambition for the benefit of certain ministers and ministries in the Union Government. The Congress took a chance with the CPI(M) on the nuclear issue and failed. But, they are not going to repeat the same tactic on a more unpredictable Mamata so early on in this government. So it appears that the Congress party will tread more cautiously on the PSU disinvestment programme for a less troublesome stay in power. (IPA Service)