Here is an enigma wrapped in a mystery. Nine of the nation's foremost public sector undertakings have been bestowed financial autonomy in order to turn them into global players capable of taking on the MNCs on their own international turf. Then why is the government bent on persisting with its disinvestment policy? To those who wish the navratnas well on their new course -- and these include people from P.Chidambaram downwards to commentators in the media -- this dual, indeed if not contradictory, policy appears baffling. In a variation of the well-known fable, it's like soliciting others to participate cheaply in the ownership of the goose that lays the golden eggs.

The manner in which the ill-conceived disinvestment policy aimed at bridging the fiscal deficit is being pursued, unfortunately makes no difference between a navratna and a sick PSU. Just one day after the announcement of the navratna policy on July 4, the Disinvestment Commission recommended a further ownership dilution of Indian Oil Corporation. This is surely adding insult to injury, though the government might well take cover behind the lame excuse that the Disinvestment Commission's recommendations need not be binding on it. If that is the case, then why have a Disinvestment Commission at all?

The short point here is, the navratna policy marks such a major turning point in the distinguished history of India's PSUs, that indeed this policy should be quickly considered for extension to more PSUs which are, as yet, far from the terminally ill sick bay. Of course, even the navratnas will still be subject to parliamentary accountability and the toothless CAG's scrutiny, and this is as it should be. Owners never renounce the right to accountability.

In the case of the public sector the real owners are the Indian people who can be deemed to be exercising their supervision through their elected representatives . For those who call for renouncing all parliamentary control over the PSUs, let's turn the coin over and examine whether the private sector is prepared to abide by, for example, the stringent disclosure norms prescribed by the New York Stock Exchange or the mandatory general accounting system NASDAQ insists on for listing.

Granted, filling boards with political cronies or bumptious joint secretaries whose loyalty is more to their respective ministers and parent departments is an unnecessary hangup from the past. On the other hand, the proposed search committee to be set up for filling the navratna boards should itself not go overboard and identify only such private sector managers for placement who are imbued with an anti-public sector philosophy. The thought of many Russy Modis being let loose on the navratnas is too terrifying to contemplate. There is an army of competent PSU managers whose career graphs got skewed on account of the earlier politicised atmosphere surrounding the PSUs. This has got to be cleaned up and genuinely efficient and creative managers unshackled for unlimited upward mobility.

The best PSUs can compete with any of their kind anywhere -- provided they are ensured a level playing field. It is pure myth that some overseas PSUs unshackled by government control are the best performers. Take the case of the much touted Snam Progetti. There are sufficient allegations of its ability to secure business being connected closely with extraneous considerations. As far as India is concerned you don't have to go beyond the emergency and post-emergency past to know what I mean. It is surely nobody's case that Indian PSUs imitate this abject behaviour. As for totally privatised PSUs the less said the better. In the UK this species, first handed over to their top executives quickly got down to over-charging users.

Now New Labour has come along and discovered how not to raise taxes on the people yet enhance revenue through a "windfall tax" on this privatised sector. But what about the fact that users are being overcharged?

To get back to the navratnas. Other policy frameworks are in crying need of change if the desired thrust from these jewels is to be noticed. Of the nine, four companies fall within the petroleum sector -- ONGC, IOC, HPCL and BPCL. In other words, the petroleum sector has been selected for an extra push.

Yet it is within this sector that the government has fudged the most. The oil pool deficit is a disgraceful case of legitimised robbery by the exchequer. Equally disgraceful is the manner in which ONGC has been made to do the dog's work, following which promising fields have been handed over to foreign companies to exploit along with the sovereign guarantee of being paid the higher international price. Former planning commission member Arun Ghosh and the social activist Medha Patkar have revealed details of this affair, (well- documented elsewhere). Suffice it here to reiterate Ms Patkar's assertion, which has gone unchallenged from any official quarters to this day, that the loss to the exchequer annually will amount to Rs. 3,000 crores after the Panna-Mukta oilfields were handed over to the Reliance-Enron duo for exploitation.

So, the navratna policy is, conditionally, alright to start with. But disinvestment is catastrophic. Ditto handing over oilfields and other national assets cheaply to Indian/overseas MNCs. It's time to halt the squander.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.