Column

Indians, I believe, have become so cynical that they miss the obvious. We are so accustomed to using the backdoor for getting what we want, we fail to see an open front door.

This is the case with the current political logjam on reforms. If one were to read the newspapers, it would seem as if the Left (and other cussed vested interests) is holding up everything. Finance minister P Chidambaram is thus trying to hoodwink the Left into supporting reforms by promising to use disinvestment proceeds for social projects. They are not buying. Praful Patel has been trying to privatise the Mumbai and Delhi airports with all kinds of arguments. The Left isn’t biting.

But look at what the Left is really saying. They want the public sector to be strengthened. They don’t want to sell public sector shares. On airports, they don’t want privatisation. But they are not averse to greenfield investments. In effect, they have opened the front door to foreign investment, but the Congress has failed to notice.

There are opportunities in every situation. Let’s start with the Left’s stated position of supporting moves to strengthen the public sector. This may mean there will be no disinvestment, but it need not mean no reforms. The problem comes when we equate reforms with disinvestment. Can reforms mean something more? The answer is a resounding yes.

Consider: What is the real problem with the public sector? Political meddling, and lack of real operational freedom even for the so-called navratna companies. Exhibit 1: ONGC. The petroleum minister and his babus are doing their damnedest to “fix” chairman Subir Raha for daring to oppose them. The finance ministry, for its part, is busy trying to milk all public sector units for dividends.

The only way to strengthen the public sector is to take it away from the jurisdiction of wayward administrative ministries and insulate it, perhaps by inserting a professional oversight board. Once this is done, they will learn to compete better. Ministers will also be free to set policy with the long-term interests of the country in mind. I have no doubt the Left would be happy, as long as there is no disinvestment. On the other hand, it is power-hungry Congressmen and other politicians who will be unhappy. But if the idea is pushed through with the support of the Left, the public sector will be strengthened and become even more valuable. It’s win-win.

Or take airport privatisation. We need more airport capacity and better passenger services. In 2004-05, even with our lousy infrastructure, Indian carriers saw 18 percent passenger growth. As competition hots up we are going to see this growth rate accelerating. Our needs may be better served with completely new airports, with more space and better connectivity. Sprucing up our old airports may be necessary, but you don’t need to privatise them for that. If the Left is okay with FDI in greenfield airports, this is the time to go for it. It is downright stupid for aviation minister Praful Patel to waste his energies in pushing privatisation, when he can get going with better ideas.

If I were the Left, I would be irritated with the Congress for trying to fool me into doing something I don’t want to. If I were the Congress, I would ask the Left for its views, and then use them to achieve forward movement. Granted, I won’t get everything I want, but I may also get something I didn’t know I could get. If the Left is okay with FDI in airports, the existing ones will have to perform better to stay in the race. To do that, they will need more investment, more capital, less labour resistance to change. Which is what privatisation would seek to achieve in any way. So what are we all fighting about?

Sometimes, success comes from taking the line of least resistance. Defeat follows from trying to be too clever by half.

Email: r_jagannathan@dnaindia.net