Letter by Shri E A S Sarma, Former Secretary to Government of India to Union Defence Minister
To
Shri Rajnath Singh
Union Defence Minister
Dear Shri Rajnath Singh,
Kindly refer to my earlier letters dated 3rd February, 2022 and 8th June 2022 (https://countercurrents.org/2022/02/should-the-government-disinvest-beml-at-all-is-it-not-imprudent/ & https://countercurrents.org/2022/06/why-rush-into-privatising-beml-a-cpse-that-caters-to-the-defence-forces/ raising concerns against the proposed privatisation of Bharat Earth Movers Ltd. (BEML) which is a CPSE under the administrative oversight of your ministry and plays a crucial role in meeting the strategic requirements of the defence forces.
I further invite your attention to the efforts being made by Shri H D Kumaraswamy, Union Minister for Steel & Heavy Industries to revive HMT, a CPSE located in his State, Karnataka (https://www.deccanherald.com/india/karnataka/kumaraswamy-directs-officials-to-revive-hmt-and-make-it-atmanirbhar-3077050) and my letter of 23rd June 2024 addressed to him welcoming his initiative (https://countercurrents.org/2024/06/welcoming-the-revival-of-hmt-instead-of-disinvesting-cpses-they-need-to-be-supported-and-empowered-beml-rinl-are-examples/) in which I made a specific reference to the haste in which DIPAM and your Ministry are proceeding to disinvest BEML, which is a CPSE with its registered office, manufacturing facilities and vast land assets located in Karnataka, and additional manufacturing facilities and land assets in Kerala.
BEML supplies strategic products and services for defence, engaged in manufacturing crucial items for high mobility vehicles, mining equipment and items for railways and so on. In all those activities, BEML has achieved high levels of indigenisation, earning patents for numerous designs, copyrights and trademarks. BEML’s value to the nation is therefore enormous and underselling it to any private agency would result in a serious loss to the public exchequer, hurting the national interest.
It is imprudent on the part of the Centre to decide unilaterally to privatise BEML, without consulting the two concerned States, Karnataka and Kerala, who have objected to it time and again.
DIPAM and the Defence Ministry should take note of the fact that it was the States that invoked their authority in the past under the erstwhile land acquisition legislation to acquire lands for BEML when it was set up, on the premise that the same were required for a “public purpose”, a term defined in Section 3(f)(iv) of the earlier Act as for a company wholly owned and controlled by the government. Therefore, it would be prima facie violative of that legal requirement for the government to privatise such lands. Evidently, DIPAM has not applied its mind to the legal implications of selling BEML’s lands to a private party. The decision taken by DIPAM to set up the National Land Monetisation Corporation and the corresponding decision taken by BEML to set up BEML Land assets ltd cannot be legally sustained.
In view of these considerations and the other concerns expressed by me in my letter to the Union Minister for Heavy Industries, I would appeal to your Ministry not to permit disinvestment of BEML.
Regards,
Yours sincerely,
E A S Sarma
Former Secretary to the Government
Visakhapatnam