Modi needs Atal resolve to bite PSU privatisation bullet
Unlike Vajpayee, who didn’t flinch despite strident opposition from within the saffron camp against privatisation, Modi is yet to take proposals for strategic disinvestment to logical conclusions.
Modi has more than once stated that Vajpayee was his idol in administration. The late leader left a signature stamp on economic administration by going the whole hog and handing over a number of PSUs to private companies.
Vajpayee constituted a separate Ministry of Disinvestment headed by Arun Shourie and despite pressure from the RSS and its various wings, he went ahead with privatisation. Later, the UPA Government led by Manmohan Singh consigned the disinvestment agenda to a mere department and instructed it not to touch any of the PSUs.
Under the Modi Government, the disinvestment department under the Ministry of Finance continues in its dormant role despite the NITI Aayog pushing for revival of the Vajpayee-era privatisation push to boost the economy.
“From 2016 onwards, the NITI Aayog has submitted a list of 40 loss-making PSUs for strategic disinvestment, including selling to private firms. The proposal included Air India, which got the Cabinet nod as well. But there appears to be no decisive will, which had been seen in Vajpayee’s tenure, to take the agenda forward,” said a senior NITI Aayog official.
However, the Modi Government has diluted equity of several PSUs, including oil firms, to shore up revenue.
While privatisation defined Vajpayee’s clearly thought out economic reforms with signals to private firms that the government had confidence in them, Modi’s tenure is marked with implementation of ideas conceptualised previously.
“The Modi Government has largely put in place a legislative framework for recovery of bad debt and combating black money and corporate corruption. His major economic achievements are demonetisation and GST rollout. The economic significance of demonetisation is not yet certain ...while GST had been in the making since Vajpayee’s time,” said the Aayog official.
The average growth rate under the UPA-1 government was 8.87 per cent, during which it also cloaked double digit growth rate of 10.08 per cent in 2006-07 and under the UPA-2 dispensation, it was 7.39 per cent, he said, citing data on gross domestic product (GDP) released by the Statistics Ministry. more