Many state-owned corporations have been cannibalised by vested interests. The remaining are threatened with sale
Interest in the public-sector is on the upswing. The reasons are many. Given the tattered state of the Government treasuries (both at the Centre and the States), obviously there is a huge urge to source for funds.
Compulsion of economic need has led to some action, in areas which were earlier beyond the domain of civil discourse. The reference is to black money. At least the first step has been taken to shatter this glass ceiling.
Similarly, the temptation to sell the shares of public-sector companies is large. There are few successful public-sector enterprises. The Rajasthan Minerals and Metal Corporation is one of the notable exceptions. Many of the Government’s enterprises serve the purpose of providing creature comforts and perquisites to public figures of bad political fortunes but important political profiles. However, the worth of State Government public enterprises even with divestment will be little.
The case of Central Government undertakings is somewhat different. Many have their eyes on Maharatnas, Navratna and Miniratnas. The truth is that these agencies provide the source of support and indulgence to the ruling power elite. Their guest houses and their transport support are used and, of course, they provide sponsorships to the preferred activities of the political elite.
Recall the over Rs 10 crore contribution of a Maharatna to the All India Football Federation not so long ago, because a politically powerful person of the day wanted it to be so. Hence, the divestment of even the successful Central Government undertakings is going to be few and cautious.
Yet, another source of income for the Government is the land in possession of public enterprises such as the Railways, the Port Trusts and more. Here there is huge potential but also the scope for mischief is enormous. Recall sale experiences of some specialised hotels under the infrastructure-related ministries some years ago.
Hence, the functioning of the public enterprises is one of the key inputs to the state of the economy. This is both a positive indicator and a loaded one.
One aspect of State functioning which has not received adequate attention is the traditions which they inherited in the domain of administrative action or commercial operations. Consider the case of Rajasthan till the merger of Principalities. It had a large number of Princedoms which were got merged. The extant systems of administration were superseded by a civil administration which had little percolation to pre-industrial habitats. The results are there for all to see.
Many Principalities of Rajasthan were well administered; there happiness quotient was significant. The post-integration administration had little use of these practices.
There are other stories in other States. Earlier this month I was in Hyderabad, in the older part of the city, which reeks of deprivation and penury. I was staying at the Falaknuma Palace on a small hilltop which reeked equally of opulence and prosperity. A jewel of the Nizam dynasty, it is now run by the India Group of Hotels for profit.
To understand this contrast between penury and prosperity one has to understand how the Asaf Jah rulers functioned from 1724 to 1950. The Nizams accumulated wealth with great diligence while much of Telangana populace groveled in poverty. The last Nizam, Osman Ali Khan, was reputed to be the richest man in the world. Notwithstanding the leakages, his jewels were acquired by the Government of India at a price of nearly Rs 250 crore after much legal wrangling.
People have narrated examples of how investments of Andhra origin now lay threatened in Hyderabad under the new dispensation, after the bifurcation of the State.
As of today, even private investments are internally threatened and in the last decade or so, business houses have shown a huge propensity to invest abroad.
The public sector has, in many ways, been cannibalised for varied commercial purposes. Units which have survived and are successful today are now threatened with sale. Small palliatives provide temporary succour. Time has come to re-invent administration. Mere reforms may prove pyrrhic.