The Hindu Business Line : Divestment alive still

POLITICS IS THE art of the possible and nowhere is this old adage more apt than in Indian policymaking especially when it concerns such sensitive issues as divestment of public sector undertakings (PSUs). On Wednesday, the Finance Minister, Mr P. Chidambaram, told mediapersons that the government was considering divesting small portions of equity in select profitable PSUs other than the Navratnas. He did not elaborate on the companies or the size or timing of the divestment; the pronouncement was more a smoke signal to the capital and financial markets that the Government was still serious about its divestment programme and also, perhaps, a message to the Left partners that the last word had not yet been said on the subject.

Everytime the UPA Government raises the issue of divestment, the Left reaches for the Common Minimum Programme document to remind the Prime Minister, Dr Manmohan Singh, and Mr Chidambaram of the promises made regarding divestment and privatisation. For the Left the two are synonymous though in fact and connotation they are not. Successive governments have expressed their faith in the dilution of a part of government equity instead of complete sale in order to bolster the kitty and to widen shareholder stakes in these enterprises. A broad consensus seems to have been reached, cutting across party lines, that profit-making PSUs would remain in government control. The UPA Government has adopted that tacit consensus even though the Left parties seem to think it has other plans — read, privatisation. The UPA has forsaken the strategic sale route, so favoured by the NDA government, for the retail equity approach. For the time being it has shelved the idea of divesting a part of the stake in BHEL and other profit-making Navratnas. It has also repeatedly made clear that no enterprise would change its public sector character. Mr Chidambaram's statement in Mumbai is a reminder, however, that its options are still open.

TheLeft should perhaps consider these options before throwing the CMP at the Government. First, the dilution of equity through public offerings is a democratic way of divestment as it expands the number of shareholders with a stake in the company. It fits in with the notion of corporate democracy, and without hurting worker interests, too, as the enterprise, on the government's own repeated assurance, will remain within its control. Second, as the Finance Minister and the Prime Minister have said, the proceeds of the divestment would fund the CMP's social sector commitments. Left leaders have suggested alternative ways of raising resources — widening the tax net and recovering unaccounted money. Sure. But these methods and divestment are not substitutes; they complement each other because their objectives can be made similar. Like politics, governance is the art of the feasible. The Left has learnt that in West Bengal to the advantage of the people there. Dr Manmohan Singh's Government should be made to work its divestment policies for the maximum benefit of the majority. That is a more democratic way of ruling than strict adherence to synodal texts.

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