Energetic performer

Anyone who's met Pradip Baijal, from the time he was a joint secretary in the power ministry trying to push fast-track power projects in the face of opposition from the finance ministry to his last official stint as telecom regulator (with disinvestment in the middle) knows he's an energetic performer. Most mortals wilt in the face of concerted opposition, Baijal blossoms. While doing so, he will marshal every "fact" in his favour, right from showing Enron's Dabhol costs were lower than those of new public sector power plants (in the early 1990s) to how allowing Reliance Infocomm a backdoor entry into the mobile space (in the early 2000s) benefited consumers. Many of these "facts", we now know, were awfully wrong. But for a career bureaucrat repulsed by the huge losses caused by lack of decisions of colleagues over the years, perhaps getting a few decisions wrong was a small price to pay to get the system moving.

While Baijal may have got it wrong, according to me, in his power ministry and telecom days, this book is about the phase in the middle where he did get most decisions right. At the time Baijal took over as disinvestment secretary, selling off PSUs was tantamount to selling the family silver. Baijal showed then, and now, that the argument was bogus; that thousands of crores of taxpayers' money was lost in wasted efforts to turn around PSUs and, instead of creating jobs, PSUs were actually destroying them. Indeed, as this book shows, while privatisation helped make the erstwhile PSUs more efficient and increased jobs in India, in countries like China and Russia, privatisation job losses ran into millions.

Supervised by an equally energetic, even dogmatic, minister in Arun Shourie, Baijal managed to generate around Rs 33,000 crore through privatisation. More than the money, though, are the efficiency gains by way of the turnaround of Balco, of Maruti, and a host of others (see the book for every detail on how these units turned around, from their investments, to profits and even PE values). Not bad for a man who wanted to study "systems to manage public sector undertakings" at Oxford till Steel Minister KC Pant suggested he study privatisation instead.

The problem with the book, however, is that it contains one dry fact after the other. It has none of the interesting stories that Baijal went through; of how the tourism minister was trapped into agreeing to sell some ITDC Hotels in a Cabinet meeting; of the conversations Shourie had with Shiv Sena chief Bal Thackeray after his nominee (Manohar Joshi) refused to allow the sale of Maruti; the drama of how the Maruti sale almost fizzled out when Suzuki told the government it should be paid for taking over Maruti ... A book by one of the key players without such details is unforgivable.

In keeping with Baijal's style, the analysis is also a bit one-sided at times. Thus, there's some degree of venom poured on IOC's purchase of IBP at a price more than double that bid by private sector rivals and its share price movement is shown as proof it was a bad deal (given how the CAG ripped into his privatisations, Baijal suggests a junior CAG official question the deal which was supervised by the CAG at the time he was petroleum secretary!). But Baijal himself justifies, a paragraph later, that valuations by global experts differed by an even greater magnitude in the case of Maruti; there is little discussion on how the Tatas overbid for VSNL, of how its post-privatisation profits plunged, of the attempts to use VSNL's funds to fund other Tata telecom ventures or of how, once the Tatas realised they'd overbid, they filed a suit asking for compensation. Reliance's purchase of IPCL, similarly, is defended arguing that abuse of monopolies is the issue, not the monopoly itself "" but there is no explanatio n for why IOC was not allowed to bid for HPCL when its privatisation was being contemplated.

In the end, Baijal believes the ends matter more than the process. While there is a logic to this, we're paying the price for not following process in so many privatisation deals such as the ones relating the erstwhile Delhi Vidyut Board or ports like the JNPT. But hadn't it been for the likes of Baijal, we wouldn't even be debating the importance of processes today "" we'd still be living with inefficient pre-privatisation era public sector service providers.

DISINVESTMENT IN INDIA
I LOSE AND YOU GAIN

Pradip Baijal
Pearson/Longman
324 pages, Rs 600