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September 3, 2002
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'Why should PSUs be kept away?'

Defence Minister and Samata Party chief George Fernandes has been expressing his dissatisfaction over the National Democratic Alliance government's divestment programme.

In an interview with Aditi Phadnis, he talks about his concerns in details:

Defence Minister George FernandesIn the current economic climate where rates of investment are low and those with capital are guarding it zealously, there is an argument that it is reactionary not radical to talk of review of the divestment programme.

I have not spoken about any review of the divestment programme at all. What I am saying is we should find out whether the road we have taken is the right one.

Who has benefitted from divestment of public sector companies so far? For instance, what is wrong if cash-rich PSUs are allowed to participate in the divestment process?

You are saying the proposal to debar PSUs from divestment is wrong?

I am asking what is the rationale behind debarring them?

You have said you don't approve of the way the ITDC hotels have been divested because instead of getting the hotels, what the private sector has got is land, which they are free to use as they please.

The Ashok group has 20-odd hotels. Bureaucrats can't run them. Politicians want their whole retinues to be entertained at these hotels free of cost.

The GV Ramakrishna committee on divestment had said these hotels should be handed over to appropriate agencies for better management. This happens elsewhere in the world. The owner is not the one who runs the hotels.

A lot of questions have been raised on the methods adopted to value a PSU. A suggestion is, for instance, that Nalco, a profit-making PSU, should not be divested now because global aluminium prices are at an all-time low.

Every one is talking about this. So we have to consider whether this is the right time for divesting the government's stake in Nalco.

We did the same thing with Maruti. At an appropriate time, Maruti would have got good price. But when the divestment took place, we got a much smaller package.

Some ministers have said that those criticising the divestment process are merely pawns in corporate warfare.

This accusation should not be made by anyone, at least not by the people within the government. If some people still indulge in such things, the matter should be taken up by the government.

Repeatedly, the point is made that India has lost out to China, that unlike China where there is focussed attention on economic reform issues, in India waves of dissent fog things each time a decisive step is taken.

Those who hold up China as an example of successful economic reforms process should have a better look at what that country has done.

Last week, a senior official of China Airlines was executed with a bullet to his head for allegedly misappropriating funds to the tune of $3 million. His family paid the cost of the bullet that went into his head.

Are we willing to punish corruption like that? We should emulate China in all respects. Then only you can compete with it and beat it. China deals with a thug like a thug. Are we ready to do that?

At the national executive meeting yesterday, members repeatedly emphasised that the NDA government had strayed from track. So is there a lot of pressure from below to distance yourself from the NDA?

We are either in the government or not in the government. And there is collective responsibility. If there are people who believe it is wrong to be in the government, the matter should be discussed. Responsibility in a coalition is also collective.

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