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AGAINST THE SINISTER MOVE TO DISINVEST ONGC

Established by the union government during 1956, ONGC was initially a Commission
which was declared as a Corporation during 1994 and was listed in SEBI in the name
of granting more autonomy. The trade union movement in ONGC especially the left
trade unions opposed the move terming it as a stubborn action of the government
to pave the way for its gradual privatization. It was basically the initial period of
introduction of the neo liberal economic policies in the country by the then Congress
Government against which the trade union movement in the country is still fighting
resolutely. We are passing through a period of unprecedented onslaught on the
working class and trade union movement of the country in general and public sector
workers in particular by the successive governments in the centre and the newly
installed corporate friendly BJP government under the leadership of Narendra Modi.
Over the period 1994 to 31st March 2014, Central Government has already divested
31.06% of ONGC’s share and realized Rs.27,885 crores which is 81 times more than
what has been invested by the government in this sector. The present share holding
of government is 68.94% which the present government wants to further reduce to
63.94% through additional disinvestment of 5% share and thereby realize an
amount of Rs. 18,358 crores paving the way for ultimate privatization of this stand
alone E & P company.
ONGC’s Contribution
ONGC being a public limited company during the course of 57 years of its existence
has paid Rs. 86,128 crores as dividend, Rs.3,85,041 crore to central exchequer and
Rs. 2,85,920 crore subsidy to oil marketing companies. Now the market
capitalization amount is Rs. 3,46,069 crore and the premiere company is having a
strong dedicated regular workforce of about 34,000 and secondary workforce of
another 20,000. ONGC is successful in establishing the record of Reserve
Replacement Ratio (RRR) of more than 1 consecutively for last 9 years. Te company
is in a position to make Rs.20,000 crore of profit after tax after paying subsidy
burden of around 56,000 crore to the oil marketing companies years after year.
ONGC has established hydrocarbon reservoir in the East Coast and Daman. As on
date ONGC operates with 72 on-land Drilling Rigs, 38 off-shore Rigs, 85 work-over
Rigs, 202 on-land installations, 240 off-shore installations, 23 seismic party, 79
logging units, 4 process installations and Institute / Centre of Excellences. It is
surprising that such a stand alone company is deliberately being put to sale which
undoubtedly is a move anti-national in nature and the atrocious manner to provide
easy passage to private sector to grab the national assets for a song is required to
be resolutely opposed by the working class.
Huge Contribution of Public Sector in our Economy
Today Public Sector is an inseparable part of the process and dynamics of economic
development in India. It is gloriously serving the nation for the past over six
decades by providing strong building blocks. It has been strengthening the financial
resources of the government for the investment in laying infrastructure and social
development. But since the adoption of the disastrous path of neo-liberalism under
imperialist globalization, public sector has been the victim of orchestrated
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CPSUs are increasingly funding their expansion and investments from internal resource generation. Indian Petrochemicals Corp.77. showing a growth of 36%. the projected investment in ONGC was more than Rs.018 crore in the previous year. the public sector continued to show impressive performance by maintaining the highest orders of governance and ethical practices. Disinvestment during this period was almost nil. debt is more than 80%.128 crore.17.492 crore from Rs. Equally impressive is the fact that most of the CPSU’s are debt free companies. During the year 2011-12. Hotel Corpn. our ONGC is the topmost profit earning CPSE in the country its net profit during 2012-13 being Rs.925. the turnover of all PSEs grew by almost 23% to Rs.24.048.801 crore in 2011-12 from Rs.1. CPSUs have also been contributing substantially to the country’s foreign exchange earnings.513 crore from Rs.91. During the year 2011-12. CPSUs’ contribution to the central exchequer by way of dividend payment.60. In the matter of debt-equity ratio. Displaying strong immunity to the global and economic slowdown. Amonst many other CPSUs BALCO.927 crore from Rs.7. While in public sector debt component is very less and in cases it is nil.vilification campaign negating the glorious role played by them in post independence economic development of the country. increased to Rs.84% to Rs. the score of public sector is far far better than private sector. the Department of Disinvestment was abolished and became one of the Departments under the Ministry of Finance.. Jessop. Disinvestment Drive of Modi Government 2 | Page . However subsequently during UPA-I Government under the pressure of Left Political Parties from May.35. Hindustan Zinc Ltd. thereby enhancing the global image of the country.’s three properties.38% to Rs. For instance.50% of the net profit of Rs.18. thereby reducing their dependence on government budgetary support. many CPSUs have progressed to the status of Maharatna and Navratna.1. Ltd.70 crores which is 15. This is a reflection of their high creditworthiness and global competitiveness. Modern Food Industries etc were divested through strategic sale route.1.98. For the FY’2013 alone. In TATA steel their equity is only 6% and Govt. in the case of private sector the debt component is very large and equity component is very small.641 crore while net profit grew by 5.774 crore in 2010-11. CMC Ltd...92. foreign exchange earnings of CPSUs increased to Rs. 5. Within a short span of time. Private sectors have around Rs.000 crore.40.20. interest on government loans and payment of taxes and duties.7.97.07 crore by all profit making CPSEs in the country.812 crore from Rs.56.751 crore in 2010-11. Net worth grew by 8.1. Disinvestment Onslaught during Last NDA Government In the current context we may recall that although the policy onslaught on public sector was launched by the Congress Government with Manmohan Singh as the then Finance Minister the most atrocious attack on public sector came during the last NDA Government. Thanks to the strong presence of Left forces in Parliament.14. Maruti Suzuki.40 lakh crores debt from Govt banking sectors and most of the debt are now bad debt.41. 2004. During the period from 2001-02 -2003-04 maximum number of disinvestments either through strategic sales or an offer for sale route took place.

IOCL.The Finance Ministry has identified over a dozen public sector undertakings for equity disinvestment during the remaining few months of the current financial year. BPCL.93%. 57.000 Mw by 2020’. Of the 24 refineries. Through acquisition and merger. Public Sector power installations are also under the close scrutiny of the private players.90% and 68. the highest capacity is of IOC`s Panipat and MRPL`s Mangalore refineries which stands at 15 MMTPA each. In public sector refineries. comprising of 24 refineries. The Government has been aggressively working to mop up Rs. The lowest is of IOC’s Digboi refinery which stands at 0. In power sector private participation is quite large. which comes under the private sector.58. The capacity of the RIL`s SEZ refinery and Essar`s Vadinar refinery stands at 27 MMTPA and 20 MMTPA. Government is determined to dilute them further.11%.425 crore from selling stake in PSUs and another Rs. coal & gas and petroleum are under severe attack.94%. In the refinery sector private business houses already has a big stake.425 crore by selling stake in PSUs. three under the private sector and two in the Joint Venture (JV).240 Million Metric Tonnes Per Annum (MMTPA) in 1998 to 215. 51. The country is emerging as a refinery hub and refining capacity exceeds the demand. blocks have now been made open for allotment amongst private owners not only for captive use but for even commercial mining. Arun Jaitley has said.65 MMTPA. The highest capacity of 33 MMTPA is of RIL`s Jamnagar refinery (Domestic).” The process of disinvestment in ONGC . private mining etc. COAL and NHPC among others has already been started. Heroic struggle of coal workers against the move of disinvestment.92%. The refining capacity has increased from a modest 62. HPCL.066 MMTPA. Further the union Cabinet has already approved sale of residual government equity in Hindustan Zinc and BALCO. 19 are under the public sector. Coal block allocation scam and thereafter through misinterpretation of the Hon’ble Apex Court’s verdict. is quite encouraging and the workers and the trade union movement in petroleum and gas 3 | Page . 68. In the oil & gas sector the government stake in ONGC. “our divestment programme is progressing as per schedule.15. Government has decided to sell 5% stake in SAIL and 10% stake in RINL (Vizag Steel Plant) and HAL in the current fiscal besides an outright sale of TCI. 54. Modi favorite Adani Group has already become largest private power utility in India with installed capacity of 11040 MW after acquisition of Avantha Power’s Korba West Power Project in Chattisgarh. Energy Sector Today the entire energy sector in the country – power. In the budget the Government estimated to collect Rs. Government is out to effect massive disinvestment in Coal sectors.000 crore from sale of residual stake in previously divested PSUs. respectively.43% respectively. GAIL & OIL have already been reduced to 68. We are committed to achieving our target of 20. Reliance. Adani like private business houses have been given entry in to exploration of oil & natural gas through NELP and their stake in the sector is increasing day by day. Adani Group Chairman Goutam Adani said in a statement on 25th November last that ‘… this acquisition expands our footprint in the coal mining belt and we are bullish about expanding our presence further.43.

both domestic and foreign. It is aimed at handing over huge public assets and precious natural resources at the command of the PSUs and also the control of the strategic and core sector of the national economy to private hands. it is better to understand that no management can act more aggressively against the decision of the Government. agitation and action unitedly to stop disinvestment equity in ONGC. The present government too is following the same path more aggressively and is determined to go for massive disinvestment of CPSUs. The very concept of disinvestment is a process of creeping privatization where government as well as parliamentary control will get gradually reduced in steps through induction of non-government directors and dictation of minority shareholders. the government came out to rescue the private business houses through dolling out of thousands of crore rupees in the name of ‘bail-out package’. It leads to severe onslaught on the rights and livelihood of the workers as is already evident from the condition of the workers of the erstwhile PSUs already privatized and so it is totally anti-worker too.sector must take lessons from the same to voice their united protest against the present move of the government to divest ONGC’s share. the trade union movement in ONGC cutting across affiliations is to come forward for organizing intensive movement to fight the onslaught of the government to save this premiere 4 | Page . We should take advantage of the stand of the management and immediately take all out initiative to go for campaign. ONGC Cautions Government on Stake Sale In a recent letter to the oil ministry ONGC flagged at least five issues and cautioned the Government that without resolving those issues any divestment may not realize the true potential or value of ONGC’s stature. Fight against privatization and disinvestments is thus the priority task before the public sector workers in particular and trade union movement in general and there can not be any compromise on this issue. Disinvestment of shares of PSUs is an unscrupulous ploy to privatize in phases and nothing else. It was also witnessed that when the neo-liberal path lost its creditability. It is under these circumstances. especially the foreign institutional investors (FII). Without going into the ‘ifs and buts’ of the position taken by the ONGC management in conveying their views to the Ministry. so it promotes corruption and loot on public wealth and on the people and it is anti-people too. and that too at throw away prices. the government in chorus with private big business was chanting suicidal slogans like ‘government has no business in business’ and dismantling and squeezing public sector through different derogatory measures. The disastrous dimension of disinvestment must be kept in mind:     It is aimed at sabotaging the process of self-reliant development of our country and welfare of the people in general set-in by the public sector industrial network in the country and severely compromises national interests as so it is anti-national. We must not forget that when the neo-liberal economic order was witnessing unsustainable lop-sided economic growth.

5 | Page .stand alone public sector company from the loot and plunder of the private business houses. Unity of the ONGC workers both regular and contractor must be forged at any cost. The trade unions in ONGC are duty bound to act firmly against the decision of disinvestment and go up-to any length to defeat the move.