NEW DELHI: Captains of industry are analyzing the avalanche of criticism heaped on the government's privatization process by India's most influential Hindu rightwing group and some central ministers. The scathing attacks forced Prime Minister Atal Bihari Vajpayee to come to the rescue of beleaguered Disinvestment Minister Arun Shourie Wednesday, asserting that the privatization process would continue. Speaking here, an unusually combative Vajpayee made a strong defence of divestment and reform process, rebutting the argument that disinvestment led to joblessness and distress sale of state-run companies. Experts say Vajpayee's remarks possibly marks the boldest-ever defence of India's on-again-off-again privatization process by a prime minister since the country embraced sweeping economic changes in 1991. "Some people said there should be a review... there should be debate. But to conclude even before the debate that the policy of disinvestment has been abandoned and now disinvestment is gone -- this is wrong," Vajpayee said. "An anti-reform atmosphere is being created in the country. This is not in the interest of the country." Vajpayee also slammed critics who have alleged that privatization amounted to selling India's vital assets. "Even educated, intelligent people are saying that the present government is selling everything. It has sold India. India is not so cheap." His remarks came against a background of meetings through the day Sunday that presented, most clearly, a fractured face of the government's approach to a free economy. The significance of timing of Vajpayee's riposte - the same day when Defence Minister George Fernandes, Petroleum Minister Ram Naik and Human Resource Development Minister Murli Manohar Joshi met to plan their moves against sale of blue-chip companies - was not lost on anyone. Less than a month ago, on September 7, Naik, together with Fernandes and Joshi, brought about a three-month delay in selling stakes in state-run oil majors Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL). The move triggered a sell-off of shares in the two companies, driving their market value down by over 30 percent. But the slide has not perturbed Naik, who told reporters he still felt there was a debate to be had over the security implications of the sell-off. Naik, who opposes strategic sales of government equity, said falling share prices would not change his opinion about privatization. "It is not appropriate to take a decision on (the) disinvestment of government equity in companies in an important sector like oil on the basis of what market speculators do," Naik told reporters. "We are not against privatization but we should assess whether profitable companies should be sold or not, whether we should go for strategic sales or offer shares to (the) public." Disinvestment Minister Shourie, however, argued that the privatization programme had significantly influenced market sentiment. Shourie pointed out that stocks of state-run companies had been doing well in the market prior to September 7 in anticipation that BPCL and HPCL would be privatised and that their productivity would improve after sell-off. The minister, however, made it clear that going ahead with privatization is essentially a political issue, by saying it was for the prime minister and Deputy Prime Minister L.K. Advani to address the criticism against the drive. The most bitter attack on Shourie and foreign investments came from the ruling Bharatiya Janata Party's ideological mentor, Rashtriya Swayamsevak Sangh (RSS). RSS chief K.S. Sudarshan said the economic policies being pursued "at the behest of the WTO and the IMF" were "urban-based, high energy consumptive, capital intensive, labor displacing and ecologically destructive. "Countries like Indonesia, Thailand and (South) Korea which accepted the IMF diktats are suffering today. This is not our way. Those supporting foreign models of development should be removed forthwith," he said, in an obvious reference to Shourie. He held the present economic policies responsible for terrorism as "they rendered people jobless". The latest setback to the country's ambitious privatization drive comes after the government ignored criticism and sold its stake in the telecom giant Videsh Sanchar Nigam Ltd (VSNL), oil firm IBP and the country's largest joint venture carmaker Maruti Udyog Ltd this year. New Delhi plans to raise 120 billion from sales of shares in state-owned firms in the current financial year. It has repeatedly failed to meet targets in the past because of stiff protests from opposition parties and trade unions.
Source: IANS