Buddha talks PSU reforms & World Bank

In essence, it means the closing down of at least 29 perpetually loss-making government companies and corporations and the possible laying off of a chunk of the 70,000 workers in these units over the next couple of years. These include state transport corporations and several manufacturing units.

It also carries with it a social safety net clause that not only ensures payment of dues to the laid-off workers but also ‘‘re-skilling’’ a section of them so that they can be ‘‘employable’’ in new ventures.

One reason why the state is now pitching for other international donor agencies is that the UK government’s DFID (Department for International Development) grant is largely linked to the poverty alleviation programme. But in the second phase the state government has to look beyond that and modernize the transport sector and the power sector infrastructure.

Speaking to The Indian Express, Howard Taylor, deputy country head, DFID, said that the British government would fund the second phase to the tune of 40 million pounds—a chunk of it tied to social sectors like health and education. ‘‘But the DFID, World Bank and ADB often act in conjunction with each other and the state should get a commitment on funding by the other donors,’’ he said.

One of the World Bank representatives in the meeting Rajni Khanna said that so far no formal application for loans on behalf of the state government has reached the Bank. ‘‘But the message was clearly spelt out by the Chief Minister today and we carry forward things from here,’’ she said.

Yet another important aspect of the second-phase restructuring is the interest component. While DFID’s funds came to the state government as outright grants, the World Band and ADB finances will obviously have a loan component. The Centre is said to have agreed to offer the same interest rate as the Centre pays for such funds.

Under the first phase—described as the pilot project for PSU restructuring— as many as 17 companies are in the final stages of being closed down with British DFID funding of over Rs 200 crore.

The West Bengal Chief Minister’s robust advocacy for international donors during the day comes at a time when his comrades in New Delhi hem and haw over the Centre’s ‘economic policies’’ and have vowed to stall pension and banking reforms.

Bhattacharjee himself was aware that he was speaking the unspeakable. ‘‘People talk about dichotomy. What you are saying in Delhi, you are not saying in Kolkata,’’ he said and went onto explain his position. He sought to differentiate between core sector, profit-making central PSUs and perpetually loss-making ones. ‘‘These are two different things. Their undertakings and our undertakings are different,’’ said Bhattacharjee.

Principal Secretary of the Public Sector Restructuring department, Sunil Mitra said that talks with government of India regarding the international funding will start within the next two weeks. The preliminary response from both the Centre and the donor agencies has been quite positive, Mitra said.