The Hindu Business Line : Of little import

ON SATURDAY THE Prime Minister, Dr. Manmohan Singh, morphed into a dignified, acquisitive politician, if not a statesman, by saying a lot at a press meet stretching over 90 minutes but meaning little. When the financial and stock markets open on Monday, they will have no clue on the economy to go by, as the Prime Minister has not given any. Every Prime Minister promised "mastery" in the past when prices turned uncomfortable, and Dr. Manmohan Singh refused to be different though no doubt well aware that neither New Delhi nor the Reserve Bank of India has a say in international crude prices or the spread of monsoon. Themost polite bureaucrat in New Delhi will wince at the Prime Minister's claim that economic growth has not decelerated and that the economic reforms process is on course. In its latest Annual Report, the RBI refrained from putting a number to GDP growth after predicting a 6.5-7 per cent move up in May.

After 100 days in power, the Government appears uncertain about a raising the foreign direct investment (FDI) cap in telecom, aviation and insurance sectorsdespite the passing without debate of the Union Budget, which suggested this. The economist that Dr Manmohan Singh is, he surely knows the difference between privatisation and disinvestment in public sector undertakings. Yet he confounds the audience saying there is "no earth-shattering need" to privatise PSUs. Markets realise that the Government will not be able to privatise PSUs or banks even if they are not professionally run. But PSUs and banks need funds and the government can, if it cares to, liquidate its stake to about 33 per cent for efficient working. By insisting on retaining the "public sector character of the entities," Dr Manmohan Singh is saying the time is not appropriate to put out ministries and politicians. A board is being set up (old news) to revamp PSUs when that should be the job of the board of directors of these units. But the option suits the Prime Minister, who today does not seem to hold a position — Right, Left or liberal.

While the Prime Minister was addressing a rather thin media presence in New Delhi, the Planning Commission Deputy Chairman, Dr Montek Singh Ahluwalia, speaking to public sector officials in New Delhi, wanted amendments to Article 12 of the Constitution to free PSUs from government control — a suggestion discussed long ago and thrown by the wayside. Can one think of the present Parliament, which refused to debate the Budget, taking up changes to the Constitution? The least-risk option for the Government vis-à-vis divestment is to at least scale down its stake in, say, oil companies to 51 per cent. But even that is not to be. An old assurance of doubling rural credit in the current year has been dug up when Prof Abhijit Sen, member, Planning Commission, remarked in Chennai that the real crisis in agriculture is the lack of a system that delivers. The Finance Ministry, the RBI and Nabard are yet to come up with ideas to get round the disability and reach funds to the needy; otherwise, it could just be reaching needy politicians fighting elections as in Maharashtra. Going by the Prime Minister's own maxim of judging politicians by what they do when they are in power, the Government is still far off the mark.

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