Friday, February 18, 2011

'Small ticket' reform is key to India's success

There is a continuous clamour for 'big ticket' reform. This will be heightened in the week of the coming budget. I never ceased to be surprised about this. The success of the Indian economy, I argue in my ET column, is all about 'small ticket' reform.

'Big ticket' reform in a democracy can spell popular unrest. One example of such reform that has remained in abeyance is 'reform' of labour laws ( a euphemism for hire-and-fire in the organised sector.) 'Small ticket' reform is all about gradualism, of waiting and judging the results before proceeding further.

The best example of 'small ticket' reform is disinvestment of PSUs. Thanks to phased disinvestment, the government is sitting on a gold mine in listed PSUs and PSBs. Had they been sold off at one go, the exchequer would have lost heavily. The 'presumptive losses' from 'strategic sale' of PSUs, which Arun Shourie attempted, would have been far higher than in the sale of 2G spectrum.

Had this gone through, Shourie would today be facing the CBI not just for his actions as minister of telecom but as minister of disinvestment as well!


Anonymous said...

Duh, surely you are not like one of the media (or the CAG for that matter) who whips up a frenzy about presumptive losses only?

K.R.Srivarahan said...

I am afraid there is a huge difference between what Arun Shourie attempted and what is now happening around 2G. Supreme Court has activated CBI not because of any presumptive loss but because of growing evidence of quid pro quo. Shourie does not seem to have engaged himself in quid pro quo deals.

Anonymous said...

What about the "actual" losses that PSUs run over decades? And, not just the losses visible on their financial statements? That angle isn't present in the 2G case.

Anonymous said...

Sir, any comments to the following news?