As opportunities dry up in the recession-hit 'advanced' economies, foreign funds are increasingly looking at India. The government should seize the moment to accelerate disinvestment in PSUs, argues Jagannadham Thunuguntla
What a turnaround! The United States, long considered the 'cradle of capitalism', is now busy trying to nationalise its iconic brands such as AIG, Freddie Mac, Fannie Mae, General Motors and Chrysler, under various guises but using taxpayer money.
On the other hand India, long known for its close ties with the erstwhile USSR, and officially a 'socialist' republic under the Constitution, is now busy finalising the nuances of its disinvestment policy, giving the ownership of 'public sector' undertakings back to the public, at least in part. The economic world has thus been almost turned upside down.
A further indicator of this is the well-documented shifting of economic power from the West of Atlantic Ocean (the United States) to the East of Indian Ocean and particularly the Arabian Sea (the Asia). Global investors, including foreign institutional investors, are flocking to these parts, including India. This should help the country's divestment policy.
Slow but steady disinvestment
India's disinvestment process may be too slow for many people's liking, but it has been fairly steady over recent years. The earlier UPA government which was in power from 2004 to 2009 could not pursue its disinvestment policy with full vigour due to opposition from its Left allies. Even then, during five year period the UPA government managed to complete 13 IPOs of public sector undertakings, garnering an amount of Rs27,385.21 crore.
The message from the election results 2009 is loud and clear: the Indians have changed their mindset from status quo to progress. Evolution is a continuous process in any country's life and we have displayed it thoroughly this time. The ever-maturing Indians have taken note of the UPA's efforts and given them a thumping win in this year's elections. As the new government is free from 'left' load, now it can think of 'right' things.
This naturally gives a free hand to the new government to launch clear and relatively aggressive disinvestment policy taking into account the burden of fiscal deficit in India.