Thought for the day
"Never interrupt your enemy when he
is making a mistake. "
-
Napoleon Bonaparte (French, 1769-1821)
Word for the day
Cant (n)
To talk hypocritically.
To speak in the whining or singsong tone of a beggar; beg.
(Source:
Dictionary.com)
Teaser for the day
Declare "Bhagvat Gita" as
a National Book!
What does it mean-
(a) Honor Gita and Lord Krishna;
and/or
(b) Give recognition to Gita; and/or
(c) Honor India and Indians?
I feel it is a blasphemous idea!
Kal ho na ho!
The Chandershekhar government in 1991 originated the idea of
disinvestment in public sector enterprises (PSE) with the stated objective to “broad
based the equity, improve management and enhance the availability of resources
for these enterprises”. In April 1993 the Rangrajan Committee that was set up
to make recommendation on the issue of disinvestment, made some radical
suggestions which obviously remained unimplemented. The NDA-II government led
by Atal Behari Vajpayee added the term privatization to disinvestment policy in
1999.
During Vajpayee regime some serious work did happen with regard to
disinvestment. The best part was that the government of the day bravely and
rightly focused more on "Divestment of Monopolies" as against mere
"Disinvestment of Minority stake in PSEs".
The government sought to divest its monopoly over core
businesses like ports, airports, coal, power, oil and gas exploration and
production, roads, mobile telephony, data transmission, etc. It started the
process in right earnest. However, the problem was that most of this endeavor
lacked any conceptual framework.
Consequently, we constructed bridges where there was no river.
As we discovered a decade later, lack of a strong conceptual and
regulatory framework eventually led to huge losses to government, banks,
investment and entrepreneurs due to numerous scams, non-viability and
unsustainability of projects, and legal hurdles.
It is pertinent to note here that post liberalization of trade
and commerce in 1990’s, the maximum employment and investment growth has
occurred in private enterprises. In particular self employed entrepreneurs have
increased exponentially in the country. This coincided with the sharp fall in
public sector employment. The aggregate private sector employment level has not
been able to compensate for fewer opportunities available in public and
unincorporated private sector. Consequently, the total number of employees on
live payrolls has fallen sharply since early 2000’s.
Failure to adequately address the employment issue, i.e.,
creating alternative opportunities in lieu of declining public sector and
government employment, has led to failure of disinvestment plans in once
profitable and in demand PSEs like BSNL and Air India. Labor unions have also
hindered the restructuring of Coal India (which in my view is sprinting fast to
join BSNL in the blind alley), and capitalization plans of most public sector
banks.
I have seen that in past five years, many investors have been
vary of investing in PSEs. The primary reason is total and utter disregard of
minority shareholders by the government, in not running these enterprises
strictly on the sound and prudent commercial principles. Exploitation of oil
sector companies to meet political ends is just an example in case.
To sum up, my suggestion is that government should DIVEST most
of its businesses when going is good with the world swashed with liquidity. For
all you know kal ho na ho. Selling 5-10% would not help anyone.
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