CMP, not sensex, to drive economic agenda

Our Economy Bureau
29 May 2004

Mumbai: The markets gave a thumbs-down to the anticipated common minimum programme (CMP). The officially released CMP has given a bigger thumbs down to the markets and made it clear that from now on it is the CMP, and not the markets, which will drive the political and economic agenda of the government. After all, the sensex does not vote a government out of power.

The CMP has stated that profit-making public sector undertakings (PSUs) will 'generally' not be privatised and all privatisation "will be considered on a transparent and consultative, case-by-case basis."

The navaratnas (the nine profit-making PSUs) would, in particular, be retained in the public-sector fold and no PSU would be privatised if it leads to the emergence of a monopoly or restricts competition.

The CMP has further stated that public sector insurance companies would not be privatised and the social obligations imposed by regulatory bodies on private banks and insurance companies "will be monitored and enforced strictly."

The policy document has rejected the concept of automatic hire-and-fire and not taking away or curtailing the rights and benefits earned by workers, "including the right to strike according to law." Striking a softer note, it has acknowledged that some changes in labour laws may be required making it clear that only laws "other than the Industrial Disputes Act." would be re-examined. Thus, changes in the Contract Labour Act, which is a bone of contention for the industry and those bringing in foreign direct investments could be in the offing.

The CMP has said that decisions concerning the Employees Provident Fund (EPF) will not be taken "without consultations with and the approval of the EPF Board," and interest rates will provide incentives to both investors and savers, "particularly pensioners and senior citizens."