Priti Patnaik: Keeping the public sector faith

BACKSTAGE

The desks of senior bureaucrats tend to be covered with piles of official papers and files. Heavy Industry and Public Enterprises Secretary Adarsh Kishore's table, however, has several books to add to the burden: books on poetry and novels by J M Coetzee and Gabriel Garcia Marquez.

But in the current context, none of these attract quite as much attention as R K Laxman's famous cartoon titled "India Inc for sale".

The cartoon acquires significance given Kishore's role in the government's recent short-lived face-off with Suzuki. It suggests a strong opinion against the blitzkrieg disinvestment policies of the previous National Democratic Alliance (NDA) government.

Indeed, Kishore, who took charge of the ministry in June soon after the United Progressive Alliance (UPA) government came to power, is a key yet low-profile protagonist in the UPA government's effort to overhaul the public sector and rewrite the rules of the game.

From a disinvestment-led strategy during the five years of the NDA to the revival of loss-making public sector units (PSUs), the wheel had turned a full circle thanks to the UPA government's Leftist tilt.

Kishore, who has had a long stint in the finance ministry heading the Fund-Bank division and managing external debt, is partly responsible for the task of getting ailing PSUs back on the revival track after the Board of Industrial and Financial Reconstruction (BIFR) had put a large number of them on the closure list.

Kishore is critical of the BIFR's role, saying its attempts at reviving PSUs has been negligible over the past decade. He confidently predicts that the newly-formed Board of Reconstruction of PSEs "" which comes under the finance ministry, however "" will be to PSUs what Oliver Cromwell was to Parliamentary reforms in England in the 17th century.

Kishore shot to prominence soon after assuming office, by finding an ingenious way of diffusing the tensions between the government and Suzuki over the Japanese auto giant's plans to set up its own production and marketing network in India. This would have been parallel "" and possibly a challenge "" to the operations of its successful joint venture with the government in Maruti Udyog.

Kishore played a critical role in buying negotiating space for the government. He did this by invoking Press Note 18, the controversial guideline that requires foreign corporations to get a no-objection certificate from their joint venture partners before they set up new ventures in India.

Despite his somewhat contentious stance on disinvestment, his colleagues, past and present, talk approvingly of the rapid pace and authoritativeness with which he works. His subordinates are happy since he does not hesitate to consult them regularly, the flip side being that some of them are called in for meetings three or four times a day.

Kishore holds a degree in Political Science and a PhD in Political Economy and has served in various capacities in the Rajasthan government after joining the Indian Administrative Service in 1969. Unlike most bureaucrats, Kishore's experience is backed by economic theory with research work titled "Land, State and Poverty" in 1995.

He also has to his credit a published book, Economic Reforms: State-Market Synergy, based on his post-doctoral research work at Queen Elizabeth House, the University of Oxford's centre for development studies.

During his stint in Rajasthan's finance department, Kishore is credited with having rationalised public expenditure, introducing self-imposed ceilings on borrowings and government guarantees to impose fiscal discipline.

For the moment, however, the ambitious secretary is working on infusing funds into ailing PSUs. But as 24 of these corporations discovered, the funds have strings attached in terms of stringent fiscal discipline requirements.

For the blue-chip navratnas like Indian Oil and Bharat Heavy Electricals Ltd, Kishore says he is putting in place a strategy that seeks to give them greater autonomy in areas like mergers and acquisitions.

No one is, however, quite sure what will happen to the entities (some of which have thrived merely on government support) once they are exposed to competition following the bilateral trade deals that India has been signing.

Ask Kishore the specifics of how the government will make PSUs more competitive, and he quips: "Someone said one must put a big clock in the leaning tower of Pisa. Apart from inclination it will then have the time." The question, though, is how far the current government has either.