My opinion, of course unsolicited, is that our Govt doesn't try to explain some of its controversial moves before trying to bring them in. The move for reservation was one such. Divestment of its stakes in companies is another.
Though there's merit in both these moves, it's the duty of the Govt to roll out an elaborate communication exercise to rid people of their apprehensions. It makes sense too, even though both these issues have been in the public domain for ages.
There has been no attempt, at least in the public space, to challenge the arguments of, say, the opponents of divestment. This is all the more surprising, as the anti-divestment argument seems based on layers of assumptions. When the Centre tried to divest a 10% stake in Neyveli Lignite Corporation (where it holds nearly 95% currently), these were the arguments against such a move:
1) It's a move that could lead to privatisation eventually
2) The jobs of employees will be at stake
Take 1) first. There are numerous companies at present in India where the Govt's stake is between 51 and 100%. They are not private companies, they are in Govt control. So, it's clearly a big assumption.
Now for the second assumption, for which their first assumption must hold good. It's clearly their major worry. So, assuming NLC is privatised, there 'could' be job loss. The private sector in the last decade has clearly shown that it's adding people, not retrenching them. And still there could be enough safeguards against random firing.
In fact, if it's privatised and it's a big 'if', the skills of NLC staff would fetch greater monetary benefits when the private sector too competes for such skills. But, of course, people love status quo and want to stick on to NLC as it is now.
The fear is fanned by politicians, who also dish out interesting statements like 'Don't sell the family silver.' The other argument is that NLC is a profit-making company. That's all the more reason why people shouldn't worry with privatisation.
One new entrant to politics even praised the Govt's eventual decision to stall the divestment, saying the whole of Tamil Nadu is happy with it or something to that effect. Actually, the people of the State and the country would have been a lot happier if they had been allowed to own a part of the profit-making NLC.
The Govt didn't do that, sacrificing the chance for lakhs of retail investors for the superficial happiness of 18,000 employees. And, of course, politicians who will continue to be invited for the company's functions.
What it all implies?
1) The Govt will continue to find raising resources increasingly tougher. Taxes, in many cases, have already seen their highs. Expanding the tax base could be another political challenge.
2) Point 1) becomes a monstrous challenge when we consider that many of the state govts think that it's their duty to provide everything from safety pins to TV sets free of cost.
3) All these means education and health, where the Govt should have an enormous presence, will be sacrificed. Remember, AIIMS is not the only Govt hospital in India.
PS: The Govt at least for the sake of the money that divestment raises could have sweetened the offer by presenting two possible alternatives:
1) Present salary plus benefits continue, Govt stake unaltered
2) Present salary plus benefits continue, Govt sells 10% stake which means a chance to own a part of equity
I am sure 2) would have had a fair chance!
4 comments:
Sriram,
First time venturing a comment on your blog though have visited it in the past.
When has any government ever tried to explain any of its moves? Even if it is a welfare measure, freebie in other words, does the government even think it is worthwhile explaining to the people why it is doing such a thing? When that be the case, it is a tough ask to expect any explanation before a controversial decision. By the way, I don't think the decision to sell a small part of its stake is a controversial move. From your own argument, it makes sound economic sense and is good logic. Only the media made it controversial.
Thanks Ramki, what you say about govt never explaining its moves is absolutely on the dot.
But I also believe that this round of divestment should have been carried out.
It surely makes good logic but it's another case of a small group of people holding the larger interests to ransom. What do you say?
I say, Manmohan Singh and Co should have gone ahead and called Karunanidhi's bluff. A look at Parliamentary numbers is enough to justify this move. The Congress (I) can survive in Lok Sabha without Karunanidhi's support. The Left will never withdraw support for the simple reason that they can never hope to have it so good again. Whereas if the Congress (I) withdraws support to DMK, the party is finished in the TN Assembly. Karunanidhi has more to lose than Manmohan Singh. Who knows Manmohan would have been quite happy to lose the government, I assume. Yes, it is a motley group, not a small group, holding everybody else to ransom.
Absolutely, Congress for some strange reason hasn't been able to assert itself despite the arithmetic at the State and the Centre.
The funny thing is it seems unable to assert itself even for its own good: getting a representation at the State Cabinet!
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