The Hindu Business Line : Politics of disinvestment

THERE SEEMS TO be more politics than economics in the opposition the Prime Minister, Mr Atal Bihari Vajpayee's ministerial colleagues have to the programme of disinvestment. Witness the unseemly rush to declare practically everything, from steel making and petroleum to photo films, `strategic' warranting public sector presence in them. Or, the attempt to preserve one's reformist credentials by saying that one is not against disinvestment per se, but only against sale of strategic stake knowing full well that a public offer is a non-starter. Even in these depressed market conditions the divestiture of a 51 per cent stake in the top oil and telecom companies would be worth upwards Rs 75,000 crore. That would be more than four times the monies Indian households invested in equity instruments at the peak of the stock market boom in 1999-2000.

The message simply is this: The Indian public simply does not have the appetite for large chunks of shares in major PSUs that may be on offer. Certainly, not if there is no prospect of private management of these enterprises with the possibility of unleashing hidden values. Those opposed to privatisation had better make up their mind if they are for or against disinvestment. They cannot claim to be in favour of it and also advocate a method of divestiture that is calculated to derail the process of ownership restructuring of these enterprises. Their opposition has to be viewed also in the backdrop of marginalisation of their role in governance that is inevitable once these enterprises are privatised; there is really very little to govern in their administrative ministries. History too is against viewing this purely from the perspective of ideological convictions of the protagonists. Economic issues have always provided a convenient cloak in the past for masking the political agenda of the politicians. Indira Gandhi divesting Morarji Desai of the Finance portfolio in 1969 on the grounds that the latter opposed nationalisation of banks is perhaps the most celebrated example. The issue then was successfully marketed as a pro-poor initiative, which ultimately resulted in the decimation of a syndicate of politicians brought up in the old school of Congress politics. Now, national security is being held out for the opposition to disinvestment in select sectors. The choice can hardly be faulted. With terrorism acquiring global dimensions and with India having to brave its onslaught constantly, raising this issue is bound to strike a chord in public mind.

For now, the Prime Minister appears to have adopted an ambivalent attitude to the game of political posturing. He spoke, while releasing the Labour Ministry's journal the other day, of how there are bound to be differences when knowledgeable people discuss policies. Only, this sounded more a resigned acceptance of his Cabinet colleagues forming pressure groups to push for an agenda of governance that is at variance with the consensus already established. Yet, he also talked of how there should be a limit to such debate — a faint hint of disapproval of Messrs Murali Manohar Joshi, George Fernandes and Ram Naik's tea-table confabulations. Mr Vajpayee has to decide if he wants to merely coast along or take the challenge head on.

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