If the government expected stock markets to react favourably to the Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited disinvestment decision, it was mistaken. Mr Arun Shourie made a statement in Parliament, announcing the strategic sale of HPCL and the offloading of BPCL shares through initial public offers. In addition, a certain percentage of shares in both companies will be reserved for workers at a discount. There is nothing new in this proposal, except that earlier, the idea was that BPCL be privatized through strategic sales and HPCL disinvested through IPOs. Nor is the suggestion of an asset management company to oversee residual government holdings in privatized public sector units new, and whether the AMC mantra works becomes a function of how the AMC is managed. Despite resources being fungible, the argument that disinvestment proceeds should go into a disinvestment proceeds fund, to be used for social and physical infrastructure and restructuring PSUs, and not frittered away in financing revenue deficits, has also been bandied about ad nauseam.
Hence, the minister has old wine in an old bottle. The argument that thanks to the prime minister’s intervention the government has finally been able to resolve its internal differences would have been more convincing had the NALCO decision not been indefinitely deferred and had the Samata Party not joined the opposition chorus. Nor has the issue of allowing PSUs to bid for other PSUs on offer been resolved. A cabinet committee decision precludes this, and if this bar continues, the opposition (including that within the government) will again have a field day. As Mr Shourie has rightly observed on earlier occasions, this is hardly privatization. The finance minister and the mid-year review of the economy have both acknowledged that disinvestment receipts in 2002-03 will fall short of the target of Rs 12,000 crore. More important, there are no signs that privatization will revive in 2003-04. With the appointment of a global adviser taking time, HPCL privatization will take almost two years to complete, by which time the present government may not even be in power.
Hence privatization, often treated as synonymous with reforms under the present government, will amount to a few measly Indian Tourism Development Corporation hotels. There, too, difficulties have been written about in the press, by no less a person than the minister himself. Perhaps it is necessary to mention that Mr Pradip Baijal is due to retire soon. The image of retirement for the privatization process suggests itself, what with Mr Shourie having been saddled with additional responsibilities as commerce and industry minister. MYRE may have supported privatization, as does Mr Shourie’s statement in Parliament. But the market and citizens can distinguish between noise and actual change.