Paranoia over the P-word

So the enthusiastic advocates of privatisation in the BJP are on a back foot. Coming from a political party that criticised the leftist instincts of the Congress Party and foreswore its commitment to the de-nationalisation of the public sector and to the greater glory of Indian private enterprise, the much awaited policy statement in Parliament on the recent impasse on disinvestment in the oil sector is disappointing. It shows that the pragmatists have won over the ideologues, that the appeal of dispensing patronage has a greater draw than that of implementing party manifesto. Next to the Swatantra Party, the BJP’s earlier incarnation, the Jana Sangh, was the second political party in India to be committed to the privatisation of the public sector. It saw the public sector as a legacy of Nehruvian socialism and an affront to free enterprise. Four years in office at the Centre and the BJP has been Congressified on the economic front, even if it is desperately painting itself again in saffron colours on the political.

Disinvestment minister Arun Shourie’s statement in Parliament on Monday does not read like what the minister would have liked to write. He has been passionately committed to privatisation. Many in the BJP have in the past criticised previous governments for their pursuit of disinvestment rather than outright privatisation. Yet, Shourie’s statement is quiet on where the party stands in this debate. In fact, the contours of the debate are still unclear. Why, for instance, will one oil PSU be privatised through the strategic sale route and the other disinvested through a public offer? More to the point, it is unclear if any time frame has been set for selling stock in oil PSUs. It is, therefore, not surprising that investors have reacted tepidly to the policy statement. It indicates that there is some rethinking within the government on how far it is willing to go with privatisation.

There may be a good case for not privatising PSUs in the strategic sector. However, this means the government should clearly define which areas are considered strategic and insulate them from the process. In such cases, there may in fact be a good case for new investment to make these enterprises competitive. However, once such a shortlist is prepared, why should privatisation in other instances proceed on a piecemeal basis? The time has come for a strategic vision on privatisation. However, the commitment to such privatisation seems to be weakening in a government where too many ministers have come to enjoy the perks and privileges of public sector patronage. Discerning this growing weakness within the political establishment, the bureaucracy would be all too eager to scuttle the dismantling of a carefully built empire. Who wants to give up access to free cars, cellphones, household furniture, subsidised accommodation in five-star hotels that the public sector offers our so-called ‘public servants’?