Communication gap

Some of the privatised public sector undertakings have not only increased their production but have started paying higher wages to their emp...

Some of the privatised public sector undertakings have not only increased their production but have started paying higher wages to their employees. Bharat Aluminium, Modern Food and Paradeep Phosphates are among those companies which have recorded a turnaround since the government offloaded a major chunk of its equity in these companies.

Nothing will sell better the idea of privatisation than the success of these companies and the consequential benefits that have accrued to the employees. With a lot more undertakings slated for privatisation and the government getting ready to disinvest in those companies, which have been partially privatised, it cannot afford bickerings of the kind that have erupted over a recent decision taken by Tata-controlled Videsh Sanchar Nigam Limited VSNL.

Questions can indeed be asked about VSNL8217;s decision to invest Rs 1,200 crore in Tata Teleservices, particularly when the latter is not considered a well-managed company. Equally relevant is the point whether the VSNL board had taken its shareholders into confidence when it took this decision.

It is not yet clear what role the government nominee on the board played; whether he was forceful enough to have his protest at least recorded in the minutes of the meeting. But as has been rightly pointed out, what the board decided cannot by any stretch of the imagination be described as asset-stripping.

Besides, there are avenues open to challenge the board decision, either within the board itself or, if necessary, in a court of law. In any case, it does not warrant politicisation of the kind when Communications Minister Pramod Mahajan went public to oppose the VSNL decision. It compelled Disinvestment Minister Arun Shourie to clarify that his ministry was not concerned with the decision taken independently by the telecom giant. Certainly, the controversy did not show the government in a good light.

What is worrying is the baneful influence the controversy will have on the disinvestment process, which is now at a crucial stage. The National Democratic Alliance government had an uphill task in selling the idea of privatisation to the majority of citizens who grew up on the idea that the public sector should enjoy the commanding heights of the economy.

Even within the government there was stout opposition to some recent privatisation attempts. For instance, it was with considerable effort that the government was able to offload its majority stake in Maruti Udyog Limited. Similar efforts in the civil aviation sector have not been a success. Given this backdrop, fears that the bickerings over the VSNL decision will affect the privatisation process are too real to be dismissed lightly. In no case should the government become a battleground for corporate conflict.