The Hindu Business Line : Politics trips divestment

The disinvestment script has unfolded on predictable lines. The initial decision on divestment was followed by murmurs of protest, which became dark hints of withdrawal and, now, the official Government spokesperson says that the decision is on hold pending a review. But this does not fool anybody. The Centre has simply backtracked on the question and, given the hardening stance of the parties involved, it is a moot point if the former can really evolve a consensus among those supporting the government from within and outside. That in the process, a formal Cabinet decision has virtually been shelved is not the best advertisement for effective governance.

It is part of confrontational politics that Opposition parties should seek to draw political mileage by attacking policy decisions that they think may not go down well with sections of the public. To an extent the Centre may have been justified in thinking that it could ride out the resistance from the Left whose views on divestment are well known. But surprising is its misjudgement on the extent of opposition from even among allies in the Government. It would seem to have taken a rather legalistic view of what is stated in the Common Minimum Programme. It has taken the injunction in the CMP against privatisation of profit-making public enterprises to mean only dilution beyond 49 per cent of the government's stake. But, clearly, its allies do not want any kind of dilution. Though documents such as the CMP are intended to set out a strategic agenda of governance, the dominant partner in a coalition must remember that it does not have the exclusive right of interpretation over it nor can it assume that it has wide latitude of operation. As the principal member of the ruling arrangement, the Congress has to hammer out a consensus either formally or informally on some of the contentious issues of governance so that the final decision is seen by all as being in conformity with the CMP.

As things stand now, the outlook for restructuring of ownership in public enterprises is not all that bright. But if the Prime Minister is convinced that partial or even full-scale divestment is in public interest, he must realise that politics cannot be entirely divorced from economic decisions. Political resistance to even sensible economic policy choices might well be driven by narrow partisan considerations. For leaders of regional parties these are opportunities for dispensing power and patronage; not that they will be completely absent under a private dispensation. National parties such as the Congress, whose capacity for dispensing largesse among its supporters is vastly superior to those available to regional parties, may thumb their nose at such opportunism but cannot entirely remain indifferent to the sensitivities of their regional allies. The dictates of coalition politics demand so.

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