Karna CM writes to PM to review decision to disinvest BEML

Karnataka Chief Minister Siddaramaiah today requested Prime Minister Narendra Modi to review the decision to disinvest BEML, and let it continue as a central public sector enterprise.

He said disinvestment of "strategic and profit making" CPSE only leads to private sector reaping windfall benefits and profit at the cost of public, and is likely to undermine the security of the country.

The defence ministry has given approval for strategic disinvestment of BEML Limited to the extent of 26 per cent of government share holding (54 per cent at present) with transfer of management control to the strategic buyer, Siddaramaiah pointed out in his letter to Modi.

He said the company is engaged in manufacture of defence equipment and requirements of rail transport and as such it is classified as strategic CPSE.

"Being a strategic CPSE, it caters to requirements of defence, railways, and mining industry and plays an important role in the development of the country," he added.

He said BEML is a Mini Navaratna CPSE located in Karnataka with nine manufacturing units across the state, and one unit at Palakkad in Kerala.

It operates in three major business verticals viz mining, construction, defence and rail & metro, the chief minister said.

With its dedicated and highly sophisticated R & D facility it has always come up with innovative and useful products to the above sectors, Siddaramaiah said.

"It has been continuously paying an average dividend of Rs 20 crore and taxes of around Rs 600 crore per year to the exchequer from 2007-2008 and earning foreign exchange through export of mining and other equipment to over 52 countries. "

"It has about 8000 employees and many more are dependent on this company through its ancillaries," he noted.

Siddaramaiah in his letter also reminded the prime minister that the then NDA government in its budget speech during 1999-2000 had committed to Parliament that government shall not divert strategic CPSEs and disinvestments will be limited to non-strategic CPSEs.

BEML with a freehold land of 2696.63 acres and lease hold land of 1494.93 acres is a very vulnerable PSU and cannot be sold to a private sector investor for the sake of achieving the disinvestment target, he said.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

TAGS:

Economy