Turning Left And Going Backwards
Bad news for supporters of privatisation. The Indian Express reports:
After a month-long tussle with Left that saw the suspension of the UPA-Left coordination meetings, the Government today formally called off its plans to privatise 13 profit-making public sector undertakings (PSUs) through strategic sale of equity.
Minister of State for Finance, S S Palanimanickam, in a written reply to Rajya Sabha, stated: “In keeping with the National Common Minimum Programme guidelines, it has been decided to call off the process of disinvestment through strategic sale of 13 profit-making PSUs.”
[…]
Speaking to reporters on the government’s decision, Finance Minister [P] Chidambaram said that strategic sale route was not the “right option”. He said: “We do not think that strategic sale is a transparent method… I believe that strategic sale is no longer the proper approach to adopt. It raises more questions and is not the preferred route.”
As against the earlier government’s strategy of strategic sale, he said that the Government was considering the public offer route to sell minority stakes in PSUs.
Selling “minority stakes in PSUs” is not going to make the PSUs in question more efficient, while complete privatisation would force them in that direction. I wonder why Chidambaram says that strategic sales would not be a “transparent method”. Surely the transparency of it would depend not on the nature of the deal but on the manner of carrying it out. Isn’t he stating a lack of confidence in his own ministry?
A lot of us had immense hope that Manmohan Singh and Chidambaram, the architects of India’s reforms in 1991, limited as they were, would accelerate the pace of liberalisation. Instead, as our ‘reformers’ tango apathetically with the Left, the pace has actually slowed. What a pity.
Do not give up hope, for repeatedly selling minority stakes may result in selling of the majority! I suspect this is just to keep the Left quiet, and that when the time is ripe, these PSUs will then be sold under their very noses. Well my that’s completely un-backed-up-with-facts take on it..
Comment by TTG — August 17, 2005 @ 6:54 am
A few weeks ago, PC had expressed strong reservations about the market hitting 8,000. This announcement could be in the nature of a pre-emptive strike to cool the ardor of FIIs.
Sanjay
Comment by Sanjay — August 17, 2005 @ 10:10 am
A step away from privatization in India?
The new Indian Economy blog complains that the government is stepping away from much-needed privatization of public-sector undertakings:A lot of us had immense hope that Manmohan Singh and Chidambaram, the architects of India’s reforms in 1991, limit…
Trackback by PSD Blog - The World Bank Group - Private Sector Development — August 17, 2005 @ 12:03 pm
I agree with TTG. This will be a temporary phase until they negotiate
Comment by @mit — August 17, 2005 @ 4:43 pm
this has developed into a war of attrition between the manmohan singh government and the left. it is foolish on our part to assume that the government would somehow ‘manage’ to convince the left.
this is based on the assumption that it would manage to trade in concessions to the left on other issues in return for approval of major policy moves. this hasn’t happened until now because the left has definite views on every issue(and considers them all equally important) under the sun. so what we have witnessed in the past one year is a reshaping of the government rather than the mellowing of the left. now chidambaram even speaks in the language of the left: who cares whether it is a strategic sale or a minority stake sale? his reply only reemphasizes the importance(to the ruling regime) of continuing to carry the brown man’s burden. here, i wish to offer some career advice to mr.manmohan singh : go back to oxford if you wish to make any useful contribution to indian society.
Comment by kuffir — August 19, 2005 @ 2:57 am
Dear Sir,
Communism has failed every where yet our left parties, supported by Congress and other parties, dram of bringing communism in India. All want public sector as it is a great source of earning money for politicians, beaurocrats and poer brokers. The poor people of India are paying taxes to feed these corrupt power brokers. I really wonder we have such type of politicians why we need British Raj ?. It is a simple exercise of constitutional loot and robbery.
Comment by Subhash Parakh — August 19, 2005 @ 3:39 am
The first thing to be done is to “REMOVE LETIST CONTROL OVER INDIAN MEDIA” NDTV head Prannoy roy’s wife is Brinda Karats (Who is head of CPM womens wing) sister. Brinda Karat’s husband Prakash Karat is head of CPM Politburo
I do not wish to insult any ethnic group -but there must be reservation quota placed to prevent influx of large number of Bengalis and Malayalis in media (newspaper/TV) because 80% of them are secretly communists
Comment by UlluKaPatha — August 27, 2005 @ 5:46 pm
[…] ng to see Mr Singh finally flexing his muscles and follow up with some action? Or is this still more empty rhetoric? …our strategy for achieving rapid grow […]
Pingback by The Indian Economy Blog » Blog Archive » These Are Some Of My Favorite Things… — January 26, 2006 @ 7:10 am
Mr Singh should flex his muscles. He has every right to
Comment by David — December 12, 2006 @ 8:12 am
If not for the left parties, Manmohan Singh and his excellent team of beaurearats would have taken India to great Heights
Comment by Indian Blogger — March 21, 2007 @ 7:54 pm