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Under pressure from the Left, the government has offered to put in indefinite "abeyance", the Cabinet's decision to divest a 10 per cent stake in Bharat Heavy Electricals Ltd and freeze all divestment in profitable public sector undertakings.
In return, the Left parties have agreed not to press for a "cancellation" of the Bhel divestment decision.
The Divestment Development: Complete Coverage
This formula was conveyed to Left leaders this morning during their meeting with United Progressive Alliance chairperson Sonia Gandhi.
Sources close to the decision-making process indicated that the Left leaders had agreed to the resolution formula and will resume participation in the UPA-Left co-ordination committee meetings once the government made the announcements regarding divesting Bhel and other profit-making "navratna" PSUs.
Gandhi has been negotiating with the Left leaders in her capacity as the UPA chairperson ever since the Left parties pulled out of the co-ordination panel two weeks ago over the government's decision to carry out the 10 per cent divestment in Bhel.
Sunday's meeting was attended by Prakash Karat, Sitaram Yechury and Harkishen Singh Surjeet of the Communist Party of India (Marxist), AB Bardhan and D Raja of the Communist Party of India and Abani Roy of the Revolutionary Socialist Party. Gandhi was accompanied by her political secretary Ahmad Patel.
"The government will soon announce that the Bhel divestment decision is to be kept in abeyance. The government will also declare it will stick to the National Common Minimum Programme with regard to navaratna PSUs. After the government makes its announcement, we will have no objections to attending the co-ordination committee meetings," said a CPI leader.
Left leaders indicated that the resolution formula was put forward by Gandhi. "The proposal came from their side," said the CPI leader. Gandhi will now meet Prime Minister Manmohan Singh to brief him about Sunday's meeting, Congress sources said.
It was also indicated that the government was keen to have the Left back on the co-ordination committee panel before Singh left for his visit to the US in a week's time.
Following the agreement with the Left parties, a question mark hangs on the unofficial divestment target of Rs 10,000 crore (Rs 100 billion) set by the finance ministry.
The ministry had identified five PSUs for divesment -- Bhel, National Aluminum Company Ltd, Gail India Ltd, Shipping Corporation of India and Maruti Udyog Ltd -- to raise Rs 10,000 crore.
This money was to be parked with the National Investment Fund meant for reviving sick PSUs and for funding social sector schemes in health and education.
The government was set to gain about Rs 2,000 crore (Rs 20 billion) from the Bhel divestment. It has already invited expressions of interest from investment bankers for divestment.