List LIC

This refers to your edit, ‘The bolder option’ (June 8). The government should understand the importance of sentiment and market momentum when it comes to divestment. Clearly these two phenomena are not with us in the short term. Which means the government should look at listing LIC, which will get very good valuation, and let the public participate in its growth. General insurance companies are also a good option for listing. Profitable companies such as HAL should also be listed. There is always a scarcity premium for niche businesses. Loss-making companies should be privatised with immediate effect.

CR Arun

Email

Inexplicable delay

Why is there a delay in the notification of subsidy on NPK and withdrawal of the NPK allocation order? The fertiliser industry seems to be miffed by the fact that no subsidy rates have been announced so far for individual nutrients for complex nitrogen, phosphatic, potassic and sulphur based fertilisers.

Ordinarily these rates are announced in March, leaving suppliers and manufacturers to arrive at their own plans with certainty. But this time around the uncertainty continues despite the fact that the Cabinet has already taken a decision.

As of now the situation is such that there is a void, and theoretically, there are no subsidies available. Nevertheless, manufacturers are continuing their supply of fertilisers, marking last year’s subsidy rates on bags. By law this is not legal. Then again, decisions have been taken to withdraw the allocation control for NPK fertilisers but here again, the DoF seems to be taking its time in coming out with the notification. When industry faces a genuine problem, and decisions have been taken at the highest level, there is no reason why there should be a delay in bringing out the notifications.

Sanjay Patodia

Email

IIT-M, the scapegoat?

It is welcome that the controversy created over the ban imposed on the Ambedkar Periyar Study Group by IIT-M has been sorted out to the satisfaction of all concerned and the agitations have come to an end. It’s curious, though, that the director of IIT-M initially categorically denied that the APSG was banned; in that case, why has the coveted institution now issued a statement confirming that the ban on the study group has been lifted?

While the management has now learnt a lesson on how to handle such sensitive issues in future, it is also time for the students to confine themselves to serious studies instead of wasting their precious time on unwarranted things. It was alleged that the ban was imposed at the instigation of the Union HRD ministry. If this is true, IIT-M has been badly let down by the Centre.

Yvonne Fernando

Chennai

The Maggi business

Solving the Maggi issue calls for an understanding of the basics of quality control systems and methodology for ensuring conformance to it by sellers.

There’s utter confusion on the matter, and media debates are all about fixing responsibility. The product is being aimlessly tested across the country; we have no idea what methods are being adopted by different States.

Every product, particularly if it is an edible product, should have an Acceptance Quality Level to determine the sampling plan and define the sample size for a lot. This would constitute the macro-level mandatory plan for producers to follow. The tests would then be carried out according to clearly specified procedure.

There are quality checks of every lot by a competent authority of the raw materials too, which would then be documented. The primary responsibility of the safety and standards organisation of the government is to ensure auditing of these documents. Checks at the field level should only be on a periodical basis.

While periodical checks are a deterrent, the responsibility should rest with the seller. But no system will provide an answer unless the stakeholders involved rise above corrupt practices and work with commitment.

K Dwarkanath

Bengaluru

Good ideas

The editorial suggestions (‘The bolder option’, June 8) are quite balanced and worthy of acceptance by the government. It is, however, worthwhile to consider whether IPOs could be made in place of equities sold by the government. This step would also augur well to invigorate the primary market. The suggestion to privatise behemoths like BSNL and Air India requires deep thought because it might impact on the working of other huge public sector companies. The suggestion to sell the stakes in L&T, ITC and Axis bank is sound. In view of the government’s inclination to participate in the equity base of corporates and dispose of the stakes to garner funds, it would be beneficial to organise a corporate advisory manned by experts in the equity market performances to receive advice on a regular basis.

TR Anandan

Coimbatore

We need more bolder reforms for disinvestments to get the kind of response they need. More the market price more the government will be able to collect. However for that we need to ensure our market establishes a bull run and investor confidence is back. We need people from all over the world to invest in India but retrospective tax has pushed the market down. We need more rate cuts to stabilise and benefits to be passed on to customers. We are receiving amendments to the Companies Act 2013 now after the year has been passed; we are yet to see the new copies of the I-T return forms.

Kamal Anil Kapadia

Mumbai

Command economies of the socialist variety have held on to state run enterprises far beyond limits of business prudence. Every nation has made efforts to take up privatisation of PSUs and the success has been proportional to political will. Russia bungled and handed over vital units to powerful oligarchs. China did slightly better, yet its top 100 enterprises are still public-owned. Britain under Thatcher went on a ideological spree in the 1980s and sold off major state-run businesses. In the process, her critics accuse her of wiping out 15 per cent of the British industrial base. We have gone about divestment in fits and starts. Most of our sick units are insolvent yet liquid. These can still be sold off without much damage to stakeholders, as they need fresh management and technical upgrade. Political will is all that is needed. As regards PSUs that are doing well, private shareholder participation will give them the requisite edge to be competitive and commercially evolve into business majors. Let us not sell the family silver only to pay back debt and recover from deficits. We must do it because it makes business sense.

R Narayanan

Ghaziabad, Uttar Pradesh

Not so black and white

Though the efforts to bring back black money stashed in Swiss banks have been far from satisfactory, the government has done quite a good job of mobilising the support of other countries. The issue of the black money is more than 60 years old, and so far no government has dared to put even this much effort into it. The recent announcement by the Swiss government to follow stringent due diligence for its banks to reject illicit funds from existing and new customers has been the result of our government’s effort.

You cannot expect results within a year. Jurist and senior advocate Fali S Nariman’s suggestion to invoke the resolution of the UN convention against corruption is worth following. Parliament can pass a law to that effect and proceed accordingly.

TSN Rao

Bhimavaram, Andhra Pradesh

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