A delayed decision to sell the two oil companies, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited, may not have adversely affected the economy but it has certainly undermined the image of the government. The delay suggested two things. One is that the National Democratic Alliance is not yet sure about rolling back the frontiers of the state. The other is that the prime minister, Mr Atal Bihari Vajpayee, was not in a position to push through disinvestment in the cabinet when the matter appeared first on the agenda. It had to be shelved because of the opposition orchestrated by Mr George Fernandes. Mr Vajpayee played for time in the face of opposition and took his time to get around the issues being raised by Mr Fernandes and his ilk. This manner of functioning is a comment on the style of governance that has been adopted by Mr Vajpayee. The alibi cited for this style is very often the compulsions behind keeping a coalition government together. A more hostile reading of the evidence would suggest a failure on the part of the prime minister to impose his own authority and will on policy-making.
Mr Vajpayee can claim, of course, that he has eventually had his way. But he cannot deny that to unravel the deadlock, mediation was needed. Some question marks still remain over the decision. It has been decided, according to reports, that a strategic sale would be made in the case of HPCL and an initial public offering would be made in the case of BPCL. It is well known that an IPO seldom fetches a good price. Thus this concession to Mr Fernandes may well turn out to be self-defeating. There is another issue that might delay the process further. The disinvestment ministry is keen to keep public sector companies out of the selling process. This does not have the approval of Mr Ram Naik, the petroleum minister, who wants the Oil and Natural Gas Commission to bid for HPCL. Here again, the prime minister will have to make up his mind and take a firm stand. A PSU buying HPCL involves no fundamental change in the nature of the economy and entrepreneurship. It merely means the transfer of funds from one government account to another. The change involved is cosmetic and a token bow to the idea of disinvestment.
The hallmark of good governance is decisiveness. The test of good governance is the ability to take apparently unpopular decisions. In the arena of governance there is nothing worse than half-heartedness. Mr Vajpayee’s government does not aspire to the hallmark, fails the test and scores full marks on the worst aspect of governance. On crucial issues relating to economic reforms, the NDA has displayed reluctance. There is no clear direction from the top that the government is totally behind reforms and that the government should not be in business. Economic reforms have been hamstrung by political and party considerations. This has made Mr Vajpayee appear non- committal on the key questions of governance.