Back in business

BS OPINION

The Supreme Court's verdict stopping the sale of petroleum PSUs HPCL and BPCL is a shot in the arm for those opposing privatisation, for the crux of the judgement is that a unit created by Parliament can be disposed of only by Parliament.

And the list of PSUs created through Acts of Parliament includes companies like STC, Warehousing Corporation, MTNL, Indian Airlines and Air-India.

While the current case in the apex court was only about HPCL and BPCL, it is only a matter of time before similar petitions are filed for other PSUs created through Acts of Parliament. The government can, theoretically, move legislation in Parliament to enact the necessary changes, now that it has a wafer-thin majority in the Rajya Sabha.

But this is going to be an uphill task, especially with NDA members like George Fernandes and Navin Patnaik vocally opposing the sale of what they consider crown jewels, an opposition in which they enjoy the whole-hearted support of the Congress party and tacit approval of key BJP ministers like Ram Naik.

Of course, since these same NDA constituents have okayed the sale of PSUs like HPCL and BPCL in the Cabinet, it might just be possible to get them to agree to support the sale in Parliament. Theoretically.

The question, then, is of the road ahead? Clearly, a serious attempt has to be made to bring about a greater political consensus on vital issues like disinvestment. While the Congress' constant refrain is on not selling profitable PSUs, there is a host of examples to show that these PSUs are profitable only because of monopoly rights conferred on them "" VSNL, for instance "" and once these go, as they have to, these very PSUs are reduced to making losses.

Similarly, as the head of the BJP's economic cell pointed out soon after the verdict, the Congress has been selling profitable PSUs in the states that it is in power, like the divestment of Punjab Tractors. Clearly then, its hypocrisy on the sale of PSUs by the central government needs to be exposed.

Sadly, despite talk by successive finance ministers of linking a part of the proceeds of privatisation to development programmes, no government has publicly linked the stalling of privatisation with the stalling of public works programmes. This is something that needs to be worked upon.

What complicates matters is that disinvestment minister Arun Shourie is caught in a terrible jam in his other charge (telecommunications), with the war between the cellular and WiLL operators rapidly gathering political overtones.

In such a situation, it is unlikely the minister will be able to marshal his not inconsiderable talents to deal with the task at hand with the same felicity as in the past. With elections to four states in the offing, the anti-reforms lobby is truly back in business.