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Mani Shankar Aiyar would have loved nothing better than a stronger public sector. But he played a critical role in weakening it like never before. Even a blunderbuss like Ram Naik cannot hope to rival his record in this area

One of Mani Shankar Aiyar's greatest achievements as petroleum minister has been to make his predecessor look like a genius. Till Aiyar came on the scene, I believed almost anyone would have fared better than Ram Naik. The latter not only derailed the privatisation of Bharat Petroleum and Hindustan Petroleum, but also made a mockery of the decontrol of petroleum prices that was announced with much fanfare in 2002.

The petrol pump scandal, which gifted petrol dealerships to all kinds of Sangh Parivar loyalists, also happened during his watch. However, look what Aiyar has presided over in less than 18 months as minister: He destroyed the finances of all oil companies barring ONGC. He allowed his bureaucrats to propose the foisting of two unneeded babus on the ONGC board despite the chairman's vociferous protests. And then he had the gall to propose packing the boards of petroleum companies with Congress party cronies. Quite obviously, he was not very happy leaving ONGC in the black when the rest of the oil industry was in the red.

But Mani Aiyar isn't the only intelligent minister to disappoint. His colleague Dayanidhi Maran has been crossing swords with the telecom regulator Pradip Baijal over the latter's attempts to reduce the access deficit charge (ADC), a subsidy paid by long-distance telephony users to public sector BSNL. In the NDA regime, Pramod Mahajan managed to leave behind a complete mess in the telecom sector when he allowed Reliance Infocomm to offer mobile-like services by calling it "limited" mobility. If he had had his way, the telecom sector - now India's pride with over two million subscribers being added every month - would have been knee-deep in court battles even today.

Why do normally intelligent ministers manage to mess things up so badly? Why do they often end up achieving the exact opposite of what they intend? Mani Aiyar, for example, is a self-confessed Socialist who would have loved nothing better than a stronger public sector. But he played a critical role in weakening it like never before. Even a blunderbuss like Ram Naik cannot hope to rival his record in this area.

The answer, I believe, lies in ministerial schizophrenia. Most ministers have to play two roles: one as policymaker and another as protector of public sector companies. A third role, and this applies only to the villainous types, involves using the public sector for private ends.

Let's see where this confusion tripped up Mani Aiyar. As a populist, Aiyar the policymaker wants consumer prices of cooking gas and LPG to stay static. Ill-advised as that may be, it is still a legitimate policy option in any political economy. But as the man administratively in charge of petroleum companies, he also wants to ease their pain by asking the finance minister to lower duties.

This he failed to achieve. In the alternative, he ought to have allowed his companies to stop or reduce production of unprofitable businesses. But as a well-wisher of the aam aadmi, he couldn't allow even that to happen. So he allowed his companies to bleed.

One cannot expect politicians to do the right thing by separating their policy-making role from the ownership one. The only option is for minority shareholders of listed public sector companies to sue the government for destroying their wealth by pursuing ruinous policies. Any takers?

Email: r_jagannathan@dnaindia.net