Snarls in reforms drive leave Shourie fuming

NEW DELHI: Indian industry and economists were grappling on Thursday with a slew of attacks on a decade-old reforms process that threatens to derail the country’s economy.
Captains of industry are analysing the avalanche of criticism heaped on the government’s privatisation process by India’s most influential Hindu rightwing group and some central ministers.
The scathing attacks forced Prime Minister Atal Bihari Vajpayee to come to the rescue of beleaguered disinvestment minister Arun Shourie yesterday, asserting that the privatisation process would continue. Speaking here, an unusually combative Vajpayee made a strong defence of divestment and reform process, rebutting the argument that disinvestment led to joblessness and distress sale of state-run companies.
Experts say Vajpayee’s remarks possibly marks the boldest-ever defence of India’s on-again-off-again privatisation process by a prime minister since the country embraced sweeping economic changes in 1991.
“Some people said there should be a review... there should be debate. But to conclude even before the debate that the policy of disinvestment has been abandoned and now disinvestment is gone — this is wrong,� Vajpayee said.
“An anti-reform atmosphere is being created in the country. This is not in the interest of the country.� Vajpayee also slammed critics who have alleged that privatisation amounted to selling India’s vital assets. “Even educated, intelligent people are saying that the present government is selling everything. It has sold India. India is not so cheap.�
His remarks came against a background of meetings through the day Sunday that presented, most clearly, a fractured face of the government’s approach to a free economy.
The significance of timing of Vajpayee’s riposte — the same day when defence minister George Fernandes, petroleum minister Ram Naik and human resource development minister Murli Manohar Joshi met to plan their moves against sale of blue-chip companies — was not lost on anyone.
Less than a month ago, on September 7, Naik, together with Fernandes and Joshi, brought about a three-month delay in selling stakes in state-run oil majors Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL).
The move triggered a selloff of shares in the two companies, driving their market value down by over 30%. But the slide has not perturbed Naik, who told reporters he still felt there was a debate to be had over the security implications of the sell-off.
Naik, who opposes strategic sales of government equity, said falling share prices would not change his opinion about privatisation.
“It is not appropriate to take a decision on (the) disinvestment of government equity in companies in an important sector like oil on the basis of what market speculators do,� Naik told reporters.
“We are not against privatisation but we should assess whether profitable companies should be sold or not, whether we should go for strategic sales or offer shares to (the) public.�Disinvestment minister Shourie, however, argued that the privatisation programme had significantly influenced market sentiment.
Shourie pointed out that stocks of state-run companies had been doing well in the market prior to September 7 in anticipation that BPCL and HPCL would be privatised and that their productivity would improve after selloff.