The symbolism probably escaped finance minister P. Chidambaram and his colleagues in the Central Board of Direct Taxes. Nothing could signal the Government's faltering reforms spirit more eloquently than launching the country's biggest attempt to garner resources from the black economy -- the Voluntary Disclosure of Income Scheme (VDIS) -- at the ITDC's Ashok Hotel in New Delhi. For while the Government is desperately trying to mop up funds to finance infrastructural development -- this is what VDIS funds will be used for -- the ITDC represents its biggest failure in the sense that the Government is unable to get out of areas where it has no business to be in. In 1994-95, for example, the Government subsidised 246 central PSUs alone to the extent of Rs 4,667 crore.

It's not as if ITDC is making losses. But 38 per cent of its profits come from the monopoly it has over duty-free shops at airports in the country. Second, despite the prime location of its hotels, the Ashok Group is not considered among the top hotels in any city. Indeed, it is precisely for this reason that the Disinvestment Commission recommended that the Government sell off 74 per cent of its stake in the ITDC and even lease out ITDC hotels to private players as this will fetch the Government more money.

It's been 4 months since this was done, but no decision has been taken on either ITDC or the 14 other PSUs that the Commission made recommendations on.Why? Because the Government can't summon up the courage to take decisions which could hurt sections of labour. In fact, instead of taking a decision on the matter, it has further complicated the process of disinvestment.

Instead of the Cabinet deciding on just the Commission's reports, it has now been decided that the administrative ministries in charge of each PSU (the tourism ministry in the case of ITDC, for example) will give its own recommendations on the Commission report and this will also be debated by the Cabinet.

Theoretically, that sounds unexceptionable. After all, what's the harm in getting another point of view before deciding to close down any unit which employs hundreds of individuals, even if not in a very gainful fashion. Except that one would have thought that close to 50 years of running these enterprises and scores of reports and committees later, the answers would be obvious. Namely, that the Government's control over these PSUs, and the consequent near-lack of autonomy, is the prime reason for their dismal performance.

So what will the intervention by the administrative ministry do? Simple, the ministry will suggest that a revival package be worked out, and the government will then experiment with this for a while. Never mind that nothing will improve. The most illustrative example of how the country hasn't learnt much from the past can be found in an interview this paper carried a few days ago with Murasoli Maran, the Industry Minister who is believed to be one of the few genuine liberalisers in the Government.

Maran was asked why a revival package for the Heavy Engineering Corporation (HEC) was worked out when the Government had more or less decided to reduce its share in the PSU's equity, preparatory to privatising it. Guess what? Maran said he was the author of the revival strategy because he wanted to give HEC a chance! Of course, the instinctive reformer added that this wasn't going to be an open-ended bailout. He would give it a couple of years, and if things didn't improve then action would be taken. It's amazing, but the same story of one-more-chance-one-more-bailout just keeps getting repeated. IDPL and NTC are just a couple of recent examples of how the Government just keeps dithering on closing down PSUs and adds to the drain on the exchequer. To quote what Jammu & Kashmir governor Jagmohan said to the late Rajiv Gandhi in a different context: "Those who don't read history, make bad history."

The most glaring example of the flagging reforms' spirit, of course, is the sad saga of the oil pool deficit and the inability of our consensus-seeking Prime Minister, I.K. Gujral, to tell the Left parties to shut up and take the necessary decisions on the price hike. Isn't it amazing how the entire debate on the price hike seems to be one of a difference between Chidambaram and the Left nowhere does one read of Gujral putting his foot down.

And if Gujral wasn't able to effect the necessary hike in prices of diesel and kerosene because of the opposition of the Left parties, it would be interesting to see his reaction to Congress President Sitaram Kesri's well-publicised view that a hike in prices of petroleum prices would be retrogressive as it would hurt the "common man". Meanwhile, Petroleum Minister Janeshwar Mishra has said that he will effect a "painless" price hike soon. Never mind, if it is "gainless" as well.

Chidambaram was right when he remarked a few days ago that anti-reforms forces are gathering momentum . Except, it's not like he said, that this is happening only among Indian industry. It's happening in the very government that he is an integral part of.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.