The Hindu Business Line : Divestment and reforms

This is with reference to "Divestment not really crucial to reforms" (Business Line, July 17): The Government should not consider dilution of stake in public sector units when their profitability has risen from 8 per cent in the mid-1970s to 21 per cent in 2003-04. .

The pivotal role played by the public sector enterprises in economic development is generally ignored in any debate, as the general perception is that reforms mean privatisation. The PSUs should be granted more autonomy to take on the new market challenges.

This does not also mean that there should be no divestment. Strategic partners should be welcomed to improve the product quality and bring in other marketing strategies. But the major and decisive role in all the PSUs should be that of the Government's.

The Chinese role in this regard is worthy of emulation, to encourage savings, investments and eventual growth.

C. P. Velayudhan Nair

Kochi

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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