DMK on Saturday opposed the reported divestment of Salem Steel Plant in Tamil Nadu and warned the BJP-led NDA government at the Centre against "imposing capitalism."

Expressing concern, party chief M Karunanidhi said the PSU had taken shape during the first DMK government headed by C N Annadurai, with the foundation stone being laid by Prime Minister Indira Gandhi in 1970.

Over 2,500 persons were employed as permanent staff and on contract in the plant, while 5,000 persons were benefiting indirectly, he said in a statement here.

Instead of divesting its shares or privatising the PSU, "pro-active steps" should be taken to revive the loss-making unit, including appointing efficient managers to handle the situation and schemes introduced to give it a facelift, the DMK chief said.

Asking the AIADMK government to resist the reported divestment, he said a proposal to generate 120 MW power at the plant has been put in the cold storage and if it is revived, half of that electricity could be transferred to the state and it would benefit the PSU also.

On the Centre’s decision to merge Railway Budget with the General Budget, Karunanidhi said, the move had attracted criticism as it is an effort towards privatising Railways.

"Privatising public sector undertakings and divesting government shares under some pretext and thus opening the doors of privatisation are unfavourable steps," he said.

"The BJP government at the Centre should realise that there is a strong feeling (in the country) that it is desperate to impose capitalism in economy and Hindutva in ideology," he added.