The Hindu Business Line : V.P. Singh backs IFCI merger with IDBI

THE voice that helped in creating many a powerful political formation - that of former Prime Minister Mr V.P. Singh - has now taken interest in the future of IFCI Ltd.

As the battle for IFCI reaches its final stages, Mr Singh has come out in support of the merger of the institution with IDBI or creating a powerful development financial institution through a mega merger of IFCI with IDBI and IIBI.

"I request you to favourably consider the merger of IFCI and IDBI or alternatively consolidation of development financial institutions, IFCI, IDBI and IIBI," Mr Singh has said in a communication to the Finance Minister, Mr P. Chidambaram, on Wednesday.

He has said "in the present scenario of global competition, Indian industry needs a mega development financial institution so as to take care of the mega projects, including infrastructure projects."

Mr Singh has said that his views have been framed after discussions with the representatives of the employees' association of IFCI Ltd. The Government has been looking at two options for merger of IFCI. These include merger with Punjab National Bank or IDBI. Mr Chidambaram also recently hinted that a third option might also be explored in case both the above options do not work. However, no indication of the third option that the Government has in mind is yet known. The employees of IFCI have however, been consistently lobbying for the merger with IDBI.

Meanwhile, for the first time in IFCI's history, the institution on Monday invited its officers and employees' association to make a presentation on the merger before the company's board. Not surprisingly, the only view that was put forward during the presentation was the known stand of the IFCI staff that the institution should be merged with IDBI Ltd.

"This is the first time in IFCI's history that the officers and employees' association was formally invited by the board to make a presentation. We stood firm in our view that the institution should merge with IDBI," Mr Ram Khobragade, Convenor of the Coordination Committee of the IFCI Officers' and Employees' Association (IFCIOEA), said. Mr Khobragade led the team that made the presentation.

The association has said that both institutions (IFCI and IDBI) have similar organisational structure, systems of operation and objectives. Moreover, IDBI is the largest shareholder of IFCI, holding 30 per cent equity.

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