The Centre of Indian Trade Unions (CITU) has strongly condemned decision of the Union Cabinet Committee on Economic Affairs (CCEA) to sell a 60.72 per cent stake in IDBI Bank Ltd (formerly the Industrial Development Bank of India) to Canada-based Fairfax Financial Holdings.
This is the biggest-ever sell-out of an Indian financial institution to a foreign company to date. The bank, with net assets worth Rs 4.67 lakh crore, is being sold for the paltry sum of Rs 52,878 crore, Elamaram Kareem, General Secretary, said.
At Rs 52,878 crore, the deal would be the Modi Government’s largest strategic disinvestment (nay, an open sale of national assets) so far, exceeding the Rs 36,915-crore HPCL stake sale in FY18 and the Rs 18,000-crore sale of Air India to the TATA Group in 2022.
With the proceeds from the sale of the government’s stake in IDBI Bank Ltd., the amount under “Miscellaneous Capital Receipts” (MCR) is set to exceed the disinvestment target of Rs 80,000 crore in the current Budget.
The term “disinvestment” has now been removed from the Budget documents and replaced by MCR. If the present spree of disinvestment in CPSEs continues, the figure could easily cross `1 lakh crore for the second time since Modi came to power.
Before this so-called strategic restructuring, a euphemism for the outright sale of national assets, LIC held a 49.24 per cent stake in IDBI Bank, while the Central Government held a 45.48 per cent stake. After the sale, LIC will hold 19 per cent and the Government 15 per cent.
There will be no representation from LIC or the Government of India on the Board. With such a meagre residual Government stake and a complete surrender of control, the Union Finance Minister’s claim that “It is not a disinvestment, but a restructuring. This is because the Government will remain invested in IDBI Bank” is nothing but an attempt to befool the people of this country.