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THE CENTRE'S DECISION to adopt the path of least resistance with the judiciary on the issue of privatisation of Hindustan Petroleum/Bharat Petroleum needs to be welcomed. By discarding the options of either a review by the Supreme Court of its judgment or a Presidential reference to the apex court, the Government has shown a sense of pragmatism. Anyway, these options do not guarantee the Government success in its attempts to privatise the two oil companies expeditiously even as they raise the prospect of a confrontation with the judiciary. The decision to seek the apex court's clarification on the scope of its judgment and the direction to the Law Minister, Mr Arun Jaitley, to examine the possibility of formulating legislation to deal with the privatisation of nationalised oil companies are perhaps the best options under the circumstances. The Government has to take the other political parties along on the privatisation issue and this is recognised in the direction to Mr Jaitley to hold consultations with them. That is clearly the way to go in the interest of the sustained success of the privatisation programme.

Not all the decisions of the Cabinet Committee on Disinvestment meeting on Friday display practical sense. Divesting stake in Indian Oil Corporation is not a bad idea but splitting it into two companies of which one would be privatised is ill-conceived, as that could dismember an emerging Indian multinational in the oil sector. The proposal needs to be nipped in the bud for two reasons. First, it cocks a snook at the spirit behind the Supreme Court judgment that the people's approval is necessary before assets created with their money can be sold. The Disinvestment Minister, Mr Arun Shourie's attempt at taking the easy way out by going for a government company that has not been created through nationalisation is likely to be seen as acting smarter by half. It will certainly add strength to the view that the privatisation programme is nothing more than selling family silver to raise resources for a funds-starved government. Surely, this is not how Mr Shourie would like the privatisation programme to be perceived.

The second reason why the split needs to be opposed is fundamental to IOC. Since the fetters of regulation were removed a year ago , the company has set itself on a bold path to growth. It has acquired a significant retail presence in Sri Lanka as part of its strategy to expand abroad. It is also foraying upstream, into exploration, and downstream, into petrochemicals. Aiding and supporting these efforts are its size, and the resources that it can command. Breaking up the company will rob it of its strength and put paid to its ambitious growth strategy. The country can ill afford to enfeeble such a national asset. The Government would do well to drop this proposal immediately and pursue the path of building consensus across the political spectrum for its privatisation programme. It may be a time-consuming process but that alone can guarantee the long-term success of the privatisation programme.

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