Abstract

The case study looks at the issues relating to the disinvestment of Bharat Aluminum Company (BALCO) by the Government of India (GOI). It discusses the incidents, which surfaced after the GOI’s decision to reduce its stake in BALCO to 49% and sell the majority holding to Sterlite Industries. In February 2001, when GOI announced the dis-investment deal of BALCO, hell broke loose. The opposition parties vehemently opposed the move and accused the government of selling BALCO for a price, which was far below its actual value. There was also stiff resistance from Government of Chhatisgarh, as well as the workers of BALCO who went on a strike opposing the deal. The deadlock ended with the strike being called off after 62 days when the new management of BALCO finally brokered a deal with the workers. The case examines in detail the repercussion of the GOI’s decision to dis-invest BALCO. The case throws light on the political squabbling over the issue and also takes through the workers strike over the issue. The case is designed to stimulate the students to think about the problems which crop up in the dis-investment of public sector undertaking faced by both parties to the deal and Government and the private party, with specific emphasis on the BALCO deal.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Role of central and state governments in the disinvestment process.

Keywords

Disinvestment, Bharat Aluminum Company, BALCO, Government of India, GOI, Sterlite Industries, Government of Chhatisgarh, political squabbling