Defence Minister Rajnath Singh said all aspects of strategic sale are taken into account before disinvesting in a PSU company.
Government on July 8 defended in Rajya Sabha its plan to disinvest 26 percent of its stake in public-sector BEML and asserted that all precautions are being taken so that there are no question marks on national security.
The government has a shareholding of 54.03 percent in the PSU Bharat Earth Movers Limited (BEML) which is involved in defence, rail and mining sectors.
Allaying fears expressed by members during the Question Hour, Defence Minister Rajnath Singh said all aspects of strategic sale are taken into account before disinvesting in a PSU company.
He said it has been the policy of all governments as well as recommendation of the NITI Aayog on strategic sale of assets in public sector undertakings.
"If strategic disinvestment is being done, all precautions are being taken so that there is no question mark on our national security. We are taking all precautions and national security is foremost for our government," the minister told Rajya Sabha.
He said BEML has businesses in several segments and the defence segment has only 16.16 percent, while its rail and network business comprises 31.12 percent of its total business and mining and construction is 52.27 percent.
"It is not that defence work is being done in 100 percent of the total work done by the company," he said, adding that a committee decides on the disinvestment.
The Government has not deferred the privatisation of BEML, the minister said in written reply to a query.
"The Government had given 'in-principle' approval for strategic disinvestment of BEML Ltd. to the extent of 26 pc out of the Government shareholding of 54.03 percent with transfer of management control to strategic buyer," Singh said.
The Minister said disinvestment helps to improve management efficiency through professional competence and also allows the government to focus on its core functions instead of non-core sectors.
"Government of India is promoting Indian manufacturing companies in the defence sector and this disinvestment is being done while keeping this aspect in mind," the minister said when some opposition members alleged that the government is selling out profitable defence PSUs.
Congress leader A K Antony, a former defence minister, said defence PSUs were started after carefully studying national security and national interests.
"Our former PMs from Jawaharlal Nehru onwards thought that whatever happens in any eventuality, our armed forces should not suffer and be dependent on foreign vendors. That is why these defence PSU were started and most defence PSUs are running profitably.
"The government is one by one privatising defence PSUs and this is the latest one. Why is the government going below 51 percent and this policy is against national security and national interests," he said.
Elaborating on the BEML disinvestment, the minister said, "The strategic disinvestment process has 16 steps and only five steps have been accomplished so far in this case."
He said the transaction advisor, legal advisor and asset valuer were appointed by the government as per the procedure and mechanism laid down for this purpose.
"It has been decided to hive off the surplus land and other assets from the strategic disinvestment of BEML and dispose them of separately.
"The Expression of Interest and Preliminary Information Memorandum document have been prepared by the appointed Advisors and submitted to the government. After completion of the process, specific approval of the government will be sought again," Singh said in his written reply.In reply to another supplementary, the minister noted that India was able to avert the adverse impact of global slowdown because of its high rural demand and not because of performance of PSUs.