As the 1999 experience of the NDA and AIADMK leader, J Jayalalithaa, revealed there is need for a certain prudence in dealing with Dravidian parties. This is usually not a matter of principle, but political calculation. They exhibit great readiness to ally with whichever party is in power in Delhi, but whenever they are simultaneously in power in the state and at the Centre, you can be sure of a roller-coaster ride.
The DMK’s threat to walk out of the UPA if the Manmohan Singh government did not halt plans for divesting 10 per cent of its stake in the Neyveli Lignite Corporation (NLC) was therefore par for the course. There was no principle involved, since the party has previously supported disinvestment as a matter of policy. It was simply a matter of cynical political calculation, relating to a public sector enterprise located in Tamil Nadu. But where Left parties have hurled fire and brimstone on issues like Iran, the Indo-US nuclear deal and disinvestments, they have never actually threatened to walk out of the coalition if their demands were not met. But as we have pointed out, neither consistency nor restraint have been part of TN political culture. In view of this, perhaps, there was need to realise that some discretion was the better part of valour in the specific case of NLC. As it is, M. Karunanidhi played a shrewd hand by choosing to confront the Centre on a disinvestment issue and thereby pinning down the Left, which is part of his coalition in TN.
Even so, the government’s decision to put the disinvestments process on hold has made it look weak and vacillating within the country and abroad. It appears to be buffeted by the whims of its allies, who, in turn, are unburdened by any principle, ideological or otherwise. By every account, India stands at the cusp of history where vital economic reforms are needed to push the country up on to the path of double-digit growth. An important aspect of these reforms is the disinvestment of the government stake in business enterprises. This is not mere ideological fancy, but arises from the investment needs of the economy as well as the necessity of injecting efficiency into its State-owned sectors. Ever since the government began to divest its holdings, nearly Rs 50,000 crore have been raised through the process. But the potential of what can be unlocked is much greater, anywhere between 10 and 20 times that amount. All the resources freed will provide the government greater freedom of action to restructure entire sectors of the economy, as well as fund ambitious infrastructure development and social welfare measures. On the grounds of both need and efficiency, there are no real alternatives to the disinvestment of State-owned enterprises.
{{/usCountry}}Even so, the government’s decision to put the disinvestments process on hold has made it look weak and vacillating within the country and abroad. It appears to be buffeted by the whims of its allies, who, in turn, are unburdened by any principle, ideological or otherwise. By every account, India stands at the cusp of history where vital economic reforms are needed to push the country up on to the path of double-digit growth. An important aspect of these reforms is the disinvestment of the government stake in business enterprises. This is not mere ideological fancy, but arises from the investment needs of the economy as well as the necessity of injecting efficiency into its State-owned sectors. Ever since the government began to divest its holdings, nearly Rs 50,000 crore have been raised through the process. But the potential of what can be unlocked is much greater, anywhere between 10 and 20 times that amount. All the resources freed will provide the government greater freedom of action to restructure entire sectors of the economy, as well as fund ambitious infrastructure development and social welfare measures. On the grounds of both need and efficiency, there are no real alternatives to the disinvestment of State-owned enterprises.
{{/usCountry}}