A few weeks after Union Finance Minister P Chidambaram announced the divestment of the government's 10 per cent stake in the Tamil Nadu-based Neyveli Lignite Corporation [Get Quote], the Dravida Munnetra Kazagham led by M Karunanidhi threatened to pull out of the UPA government at the Centre.

Prime Minister Manmohan Singh immediately announced that divestment plans as a whole will be kept on hold.

Is the DMK against divestment? Why did the party not want the divestment of NLC to go ahead? What exactly happened after the finance minister announced his divestment plans?

T K S Elangovan, the DMK's organising secretary, explains all this and much more in an interview with Contributing Editor Shobha Warrier.

Why is the DMK against the divestment of Neyveli Lignite Corporation?

Even when Murasoli Maran was the Union minister for industries, he had said that profit-making PSUs (public sector units) should not be divested. So, we cannot accept the divestment of a profit-making PSU (like NLC). This was incorporated in the Common Minimum Programme also. So, our party is against the divestment of any profit-making PSU.

When the news of the divestment of NLC was first announced by the finance minister, the DMK did not raise its voice. Why later?

We are not like the Left. We are in the government, and when a decision (to divest NLC) was taken by the Cabinet, it was binding on us. We cannot escape the decision even though we were not present in the meeting.

So, our leader (Tamil Nadu chief minister and DMK supremo M Karunanidhi) suggested a 'via media' decision that the shares may be sold to the employees themselves so that they also become the owners of the company. When our leader wrote this to the prime minister, he said that priority will be given to the employees and we thought they will be happy.

But the employees were far from happy. That was because the amount of divestment, Rs 100 crore (Rs 1 billion) is a whole lot more than their purchasing capacity.

The major trade union at NLC is backed by the DMK, but they did not listen to the party's suggestion.. .

See, sometimes we have to listen to the trade unions. We are politicians and trade unions are representatives of workers. We have to respect their feelings. As they were not willing to agree to the solution suggested by the chief minister, they went ahead on with the strike.

Did the decision of the trade union backed by the DMK come as a shock to the party?

No, no. There was no directive by the party to the trade union not to participate in the strike. We suggested an idea which was unacceptable to them. So we decided to change our stand. Actually, we decided to stick to our original stand. What we had suggested was a deviation from our original stand. Our stand has always been that the profit-making PSUs should not be divested.

But when the Cabinet had decided to divest and we are also a party in the government, we had to go by it. So we had suggested an alternative.

Was it because the AIADMK (All India Anna Dravida Munnetra Kazagham) made a lot of noise that the DMK decided to take the tough stand of coming out of the government?

No. We did not want to be a party to this decision. When we are against the decision, and our trade union is going ahead with the strike, what is the use in us continuing in the Cabinet?

Did your party have any talks with the finance minister earlier?

Those talks were going on. Immediately after the announcement, our leader talked to the finance minister. He then gave certain explanations. See, we are not against the government; we are a part of it. In the present economic scenario, even if the government takes certain decisions which are against our policies, we have to accept them. At the same time, we cannot let down our employees. And, we cannot let down our policy in toto.

What we said was, since we are in the Cabinet, the blame will fall on us also. So we will keep out of the government. When the DMK found that the employees of NLC were not willing to listen to the idea mooted by the party, Kalaignar Karunanidhi wrote to the prime minister again asking to shelve the idea.

When was it?

On the morning of the day the strike started.

What was the response?

There was no response. Then Kalaignar issued a statement that if the central government could not resolve the issue, and since whatever decision taken by the government would be binding on us, the DMK did not want to be a party to it.

Why were you not in the Cabinet meeting? Neyveli Lignite Corporation is in Tamil Nadu, and the DMK is a major partner in the government�

You cannot have all the ministers taking part in all the Cabinet meetings.

But this concerns a unit that is in Tamil Nadu�

Yes. You are right. This is a very important issue. Two ministers were not in the country. One minister was away in some official programme.

Even the finance minister is from Tamil Nadu. But when we found that the employees were taking a strong stand, we also had to take a strong stand.

How did you convey the message to the prime minister that the DMK would be pulling out of the government?

The statement by the party was conveyed to the prime minister by (Telecommunications Minister) Dayanidhi Maran and (Environment Minister) A Raja. They met the prime minister and had discussions with him. Some senior ministers of the Cabinet also were there then. Even the finance minister was there. Then, the prime minister decided to withhold the entire process of divestment.

What will happen to all the divestment plans?

It is just kept on hold. Not abandoned. We will insist that the government can divest loss-making PSUs. The prime minister wants to have a review on divestment after talking to all the coalition partners. He will take a decision taking into confidence all the coalition partners.

We have no objection to that.

So, DMK is not against divestment per se?

No, we are not against divestment per se; we are only against the divestment of the profit-making PSUs. This is also an agreed policy in the CMP.

Not many will be interested in buying the loss-making PSUs.

That is quite true. But divestment alone is not the way to grow. There are many ways. Ten years back, when another plant was erected by a private party in Neyveli, there was strong opposition. Now that industries have opened up, another project is coming up at Jayankondam where private entrepreneurs can come and start their units. We are not going to object to it.

In a profit-making PSU, development or funds are not problems. What we feel is, they want to divest 10% of NLC today. Once it is permitted, tomorrow, it may increase. We will not be able to stop it.

Don't you think the time has come now for the government to move away from running businesses and concentrate on running the country?

Yes, the scenario is changing, and the government need not run businesses. But if you take a sector like power, only the government can supply power at a lesser cost because the government has a social obligation to fulfil, unlike private business houses who will only be interested in making profits.

Photograph: Sreeram Selvaraj

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