Former civil servant EAS Sarma has written to the President of India urging her to reconsider the Centre’s decision to divest its stake in IDBI Bank, a move valued at ₹52,878 crore. The letter, reported on 20 October, highlights concerns over the social costs of the disinvestment, which Sarma argues outweigh the benefits. IDBI Bank shares closed 2.23% lower at ₹84.12 on 19 October, reflecting market sensitivity to the development, according to livemint.com.
Sarma’s letter emphasizes the President’s role as a stakeholder, noting she holds equity shares in Central Public Sector Enterprises (CPSEs) worth ₹4,50,740 crore across 475 companies employing over 7.8 lakh people. He requested the President to direct the government to review disinvestment policies broadly and IDBI Bank’s stake sale specifically. Sarma also called for an independent inquiry into the legality and prudence of the proposed sale, with findings to be presented before Parliament, as detailed by livemint.com.
The disinvestment of IDBI Bank is one of the largest in recent years, with significant implications for public sector banking and government asset management. CPSEs collectively generate annual net profits of ₹3,08,674 crore and dividends of about ₹1,38,503 crore, underscoring their economic importance. Sarma’s intervention draws attention to the potential social impact of the sale, contrasting with the government’s push for privatization to improve efficiency and fiscal health, according to livemint.com.
IDBI Bank’s stake sale has sparked debate over the future of public sector enterprises in India. Sarma’s letter to the President was made public on 20 October, and the government has yet to respond officially. The next key event will be any parliamentary discussion following the proposed independent inquiry into the disinvestment process, as reported by livemint.com.