They have reason and it’s not just to do with the target shortfall—even this year, 50 per cent of the target will be met, most of it by window-dressing. It’s more because the government speaks on privatisation in many voices. More important, the ministries are very reluctant to let go—of the power and the privileges.
For proof, look at the Maruti Udyog Ltd (mul) decision taken on January 13. After months of dithering, mainly at the instance of heavy industries minister Manohar Joshi, the government has finally arrived at a circuitous formula—it will first issue rights shares so as to allow Suzuki to pick up its share. The Indian government will not, and in its stead, domestic financial institutions (FIs) will pick up the rights. At a later stage, the FIs will be allowed to offload it to the market, including the public. If this is privatisation, then selling off the stake to being "sold off" to General Motors, a keen bidder and shareholder, would probably have been a better idea. Apart from the fact that it puts a huge cloud over the future price benefits for mul shareholders.
Most of all, it signifies a great victory for Joshi. The Maruti privatisation formula could well turn out a precedent for the government for other more contentious privatisations—how not to do them. Is it any wonder that ceos—even 25 per cent of the citizens want the budget to focus on disinvestment—are pressing for a single-point programme on privatisation?
