We are reformers in spring and
summer; in Autumn and winter we stand by the old; reformers in the morning ,conservers
at night.
--R .W.Emerson,The Conservative.
More than a two
decades has passed after taking a dip
into the global phenomena of LPG (liberalization, privatization &
globalization), yet the proponents of
LPG seem to be muddle-headed about the end we are heading to. At this juncture,
it becomes quite pertinent to raise the questions like– What was the purpose of
initiating the reforms process? Are we
heading towards the outlined objectives even remotely? What were the result
that were expected and how far have we been able to achieve them as of now?
Reform is a wider concept,in fact, it’s an end to be achieved through different
means. But in the recent past, their has been more emphasis in privatization.
It would not be an exaggeration to say that an impression of “Made for Each Other”
was created. Privatization has become sine qua non for reforms. For lack of
proper understanding many consider both synonymous although they aren’t. There
are many mini-navratnas which are performing exemplary even under the aegis of
state.
There cannot be second opinion on
the fact that economic reforms need to be carried out with even greater zeal, but
does that mean mindless relay for privatization. Is selling –off the national
assets at the throw-away prices the only panacea? The divestment of Modern Foods
Ltd and Centaur Hotel in Mumbai are the fitting examples.
The credit must go to the
electorate of the country which through the mandate of 2004 Lok Sabha elections
compelled all the political parties to re-tune their privatization song. All of
a sudden they have started singing the tunes of “ divestment with human face”. If
we examine the economy and it’s compulsions bereft of any prejudice for
privatization and also examine the gamut of decisions taken by the successive
governments a question would arise– Can the state pull out and be a mute
spectator to the market economy.1) The case of UTI-The government had to bail
out Unit Trust of India, its flagship scheme US-64 to be more precise, twice,
once in 1998 and secondly in 2002 by providing a package of around Rs.14000
crores, which beyond doubt was tax-payers money . That means bailing out the
people by their own money for no fault of theirs. Accountability was fixed on
Mr.Subramanianm who ignored the recommendation of Equity Research Cell(ERG) for
not investing in the selected stocks .Yet the alleged involvement of PMO in
getting the decision of the Chairman changed raises many questions
.Unfortunately, like other scams it is also a part of history and forgotten now. But the point to be emphasized is , the “State”
had to intervene and at that point even the catholic proponents of market
economy justified the bailing out citing reasons of social obligations of the
government.2) The case of SAIL-Steel Authority was bailed out with a package of
around Rs.5000 crores. And it continued to enjoy the status of Navaratna!.
3) The case of Global Trust Bank (GTB)-The case of bailing out of the GTB , a
private sector bank by the government is most interesting. GTB was merged with
the Oriental Bank of Commerce. Going through this example, can anyone say that
the state could pull out from the economy. Here lies the state of confusion.On
the one hand, even the profitable organizations were sold in the name of market
economy, while on the other, it is also continuing to feed the non-profitable
organizations in the name of social obligations and political compulsions. The
case of “Indian Telephone Industry” is a classic example of running the public
undertaking on oxygen because of political consideration.
If these examples are not enough
for the people obsessed to compare Indian economy with those of the U.S and U.K.
then here are few examples from these
developed country’s too. After the 9/11
incident, the Federal government in order to help the airline industry gave around
$5 billion in cash and went further to promise another $10 billion (in the form
of loans) . Another incident which deserves mention is the imposition of 1000%
import duty on Indian steel to protect its own steel industry in April 2001.
But here lies the difference in
the mode of assistance extended between U.S. and India. U.S. came to rescue the
entire airline and steel industry whereas we provided sanjivni(life) to
selected corporations from their respective industries. Talking of U.K. the
privatized railways had to be bailed out injecting taxpayers millions of pounds
so that it remained on tracks.
