The Telegraph
Since 1st March, 1999
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Test for reforms at start of second year

New Delhi, May 26: Just past his first anniversary in office, Prime Minister Manmohan Singh today honoured a “new year” resolution by deciding to divest 10 per cent of the government equity in Bharat Heavy Electricals (Bhel), setting up an immediate clash with the Left.

The CPM and CPI accused the Centre of going against the promises made in the common minimum programme (CMP) and encouraging “privatisation through the back door”.

But the government seemed willing to use the fine print in the document to deflect the criticism and defend its reforms programme.

The CPM politburo said in a statement that “in the light of the commitments made in the national common minimum programme, the CPM considers this cabinet decision to be directly contradictory”.

It said the CMP “categorically states that the government shall not disinvest/privatise the profit-making public sector undertakings”.

But the government side denied this. “No such commitment is there in the CMP,” a Congress leader said. “The CMP actually states that the UPA will retain existing navaratna companies in the public sector while these companies raise resources from the capital market.”

In the coming months, the government can be expected to tap these finer provisions in the CMP more and more, interpreting them creatively as it pushes the reform initiatives forward.

Singh, who last week spelled out his reform agenda for the next four years in the run-up to the anniversary celebrations, has made revival of divestment in public enterprises a key priority.

Yet Singh hasn’t received the kind of political support he seeks from his own party. At least twice last week, he had made a strong pitch for “political consensus” within the Congress and among the UPA partners for “bold policy initiatives that we have to initiate to take our country forward”.

But having fought the last election on a manifesto targeting the common man, his party leaders have remained reluctant supporters of reform.

Congress leaders increasingly agree with the Prime Minister that the reforms must continue if the UPA’s farm and social sector commitments are to be fulfilled without sacrificing the goals of accelerated economic growth and development. Yet they cite coalition compulsions to explain their defensive attitude.

For instance, Sonia Gandhi, as UPA chairperson, cannot speak merely on behalf of the party but has to reflect the views of the allies too, a party leader said.

“Even ardent supporters of economic reforms in the party have been restrained in advocating them in the past one year,” he added.

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