The Hindu : Shourie hints at extending disinvestment to more arenas

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Sunday, Feb 02, 2003

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Shourie hints at extending disinvestment to more arenas

By Our Staff Reporter

KOCHI FEB.1. The Union Minister for Disinvestment, Communications and Information Technology, Arun Shourie, has hinted at extending the disinvestment process to more arenas. He was inaugurating a national seminar on strategic issues of disinvestment policy, organised by the TKM Institute of Management, Kollam, here today.

Picking out cases of huge losses suffered by the Government because of investment in public enterprises, the minister emphasised the need for disinvestment. The process was aimed at making use of the country's resources, including human capabilities at optimum level. It would require continual adjustment of policies to seek the objectives as the country is going through a phase of transition, he said.

The minister argued that the word disinvestment was a misnomer as it was only a devise for increasing investment and re-investment. The present phase of our economic reforms was the result of internal impulse of the Indian society rather than globalisation. Likening the country `during the licence raj' to an `octroi post', the minister said the role of the State was to augment its resources and improve the economy.

Citing examples of Balco, Computer Maintenance Corporation, IDPL, Paradip Phosphates and various State electricity boards, he said procedural delays and unaccountability had resulted in massive losses to PSEs of the country `of government servants, by government servants, for government servants'. Though committees were set up, nothing could be done to avert bankruptcy. As many as 35 revival packages were prepared, but that too involved a cost of Rs. 40,000 crores. Out of the 1,000 odd public enterprises in the country, one-third was `non-functional'. Corrupt officials and `traders in unions' were perpetrating the faulty system in public enterprises, he said. Disinvestment was the only way to save wages and to grow employment, he said, again citing the examples of Balco and Paradip Phosphates.

What happened in the insurance sector would have to be applied in petroleum sector, the minister said. The fears on `strategic sector being opened up to private sector' were frivolous, he argued. There would be regulating mechanism as in the telecom sector. Like a river flowing well within strong banks, the new reforms would chart a smooth course with the regulatory system. Several State governments are unable to pay salaries to the staff. The major part of central tax revenue was utilised for paying interest on past debt. Countries such as China could achieve 10 per cent growth rate only because of the change in the attitude.

Earlier, the State minister, M.A. Kuttappan, sought to justify privatisation by pointing out the good performance in those sectors. A historical error was being corrected by the new reforms, he added.

Former Union minister, S. Krishnakumar, Raji Philip, Managing Director, Hindustan Paper Corporation, A.M. Salim, Director, TKM Institute of Management, were among those who spoke.

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