Whats in this report for the common man?
If the government does things as suggested, the common man gets clean water, better sanitation, uninterrupted power supply and better roads. For instance, better road and port facilities will increase business efficiency resulting, in say, lower prices.
How will shifting the monopolistic status of the utilities from the public to the private sector help?
Getting the private sector into setting up infrastructure will induce competition in the sector. This will increase efficiency. And where this (competition) is not possible, we have recommended regulation. The figures for power do not take captive power into account. When power utilities fail to deliver, captive power takes over as far as the industry and the better off are concerned. So, you have effectively privatised but inefficiently.
Will privatisation change things?
The report focuses not on privatisation but on 100 per cent commercialisation in the public or private sector. The question of ownership does not arise. Currently, the dominant ownership is public. We are suggesting that you charge commercial prices, but keep in mind the question of equity.
Given the current gloom, how relevant is your assumption of a 7.5 per cent and higher growth rate in future?
Imagine what will happen if infrastructure is as it should be. The economy will boom. You feel that the insurance sector should be opened up. Do you think thats practical? The common man wants credible instruments for savings. By opening up insurance, provident funds and pension funds, there will be widespread availability of these services. With increasing urbanisation, people will need more access to these instruments for their retirement. This will also provide the kind of funds needed for infrastructure in the capital markets long - term funds. As far as opposition is concerned, it was a similar scenario when airlines and banking were opened up.
If the government finances the vulnerable start up phase and gets out once the project gets going, arent you looking at public funds as private crutches?
The objective is not privatisation, but providing infrastructure. What weve suggested is a practical alternative. It was a similar situation in the 1950s and 1960s, when the government invested in areas that the private sector had neither the inclination nor the funds to get into. Infrastructure is not a zero-one game. The government does, and will continue to play an important role. Ownership is a secondary issue.
Do you think there is enough political will to implement your report?
The kind of changes that youve seen in the last five years are reflective of that will. Despite all the confusion in politics we have moved ahead and each sector has seen huge changes. You have to realise that times have changed and the economic environment is different.
