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Disinvestment panel makes little progress - The Times of India

M Gautham Machaiah ()
23 December 1996

Title : Disinvestment panel makes little progress
Author : M Gautham Machaiah
Publication : The Times of India
Date : December 23, 1996

The disinvestment commission set up by the Centre to restructure public
sector undertakings (PSU) either by privatising them or off-loading shares in
favour of workers, has made little progress. Though the commission was
constituted two months ago, At Is yet to even formulate an opinion on whether
shares In PSUs should be diluted in the first place.

Reason? Stiff opposition from bureaucrats heading these organisations who
fear that their powers will be clipped in the event of disinvestment.
Besides, a section of the workers themselves are averse to the idea of
becoming part-owners in these firms.

A member of the commission told The Times of India, "The bureaucracy is yet
to get over its previous hangover, while the labour has to be conditioned to
changing circumstances."

Most IAS officers in charge of various PSU who appeared before the commission
have vociferously demanded autonomy, while at the same time opposing
privatisation. The Indian Tourism Development Corporation (ITDC) is a classic
case. ITDC executives made it very clear before the commission that they did
not want to let go of the five star Ashoka group of hotels, because it "is
our flagship." When commission members sought to know what public service a
five star hotel catering only to the elite rendered, the executives promptly
replied, "We agree with you intellectually, but want to keep Ashoka."

"The officers themselves are not clear about what they want. They are all for
autonomy without accountability," the commission member said,

The labour on the other hand has expressed diametrically opposite views. The
communists while opposing privatisation tooth and nail believe, that making
workers part-owners by disinvesting shares In their favour is not the
solution. Commission members have pointed out that the performance of the
workers will in crease once they own a percentage of shares, but this has not
convinced the communists. Their argument is that the workers might sell the
shares once the price goes up.

The unions, however, have one assurance which has failed to cut any ice with
the commission: "We will cooperate in the future." But why did they fail to
cooperate all these years? No answer.

Non-communist labour unions are in favour of equity participation by workers
but are unable to understand how this will increase productivity.



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