If there is some uncertainty over what might happen after the election, this extends to the fate of disinvestment also. While there are hints of a political consensus over unloading of government equity in PSUs in principle, it is not clear if the new government would accept the Disinvestment Commission's recommendation of sale of government stake in public sector undertakings being delinked from fiscal compulsions. What has been bothering the commission is the fact that it has no accountability and what it proposes can be disposed off in the manner the political leadership and administrative machinery think fit. While the Deva Gowda government had initially mooted the commission being entrusted also with the responsibility for implementing its recommendations, when the terms of reference for the commission were finalised, this was left out and the commission was only asked to confine itself to making proposals on the nature and level of disinvestment. As a consequence, the commission is finding itself in a situation where it is not held answerable for the suggestions it comes up with from time to time.

The moot question is whether after the poll the political leadership will make the commission not only the recommendatory agency but also the implementing authority. In recent months, several of its pragmatic suggestions were cursorily treated. The commission wanted the government to go slow on tapping of the global GDR market and to use the domestic market more. In its assessment, the UTI which has been able to raise from the market Rs 5,000 crore from a depressed market was well placed to do the unloading of public sector equity and the government could have sold some of it to the Trust and shared the realisation with it. In respect of MTNL also, the commission argued for domestic unloading of part of the government stake. The commission further advised a policy of wait and proceed in respect of the planned global unloading. All these have not found favour with the government.

A disinvestment policy that is independent of fiscal pressures is easily the most pragmatic proposal mooted by the commission. The government should have heeded this and constituted a special fund out of the proceeds from sale of government equity. This would have enabled the government to do the disinvestment professionally and secure the best response without bothering about what would happen to the budget.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.