'Govt will sell Maruti, VSNL, MTNL stakes soon'

He has the unenviable task of delineating politics from economics in the highly politicised environment of public sector units. His job is to drive home the point that control doesn't necessarily translate into profits. Meet Pradeep Baijal, Secretary, Department of Divestment, on whose shoulders rests the burden of getting the country's top PSUs out of the mess through privatisation. But that means Baijal has to convince a whole lot of politicians, trade unions and cajole 'unionised' employees of these loss making, inefficient units.

Baijal shares with his views on the divestment process with Neena Haridas.

Tell us, how tough is your job?

It is a roller-coaster ride, with all its highs and lows. The only easy part of my job is that the government is really serious about divestment.

It wants the privatisation process to get on course. And, this is where my job begins to get tough. We have a very strong public sector in this country: there are so many fields that are on a government leash -- banking, mining, oil, even automobiles.

We have to pick and choose from the most important areas of these, get the companies evaluated, call for bidders -- the process is so long-drawn. The job doesn't end with just the Divestment Commission submitting its report: it actually begins then. Some might call it tough, but I prefer to call the task challenging.

Were you disappointed when the much-hyped divestment proposals in Maruti Udyog, MTNL, VSNL did not find a mention in the government's agenda?

It is not a matter of disappointment. It is a matter of understanding the situation in which the divestment process has been initiated. You can't rush into things and then feel short-changed. We have been going slowly, but steadily. Modern Foods was the first PSU to be sold off (to Hindustan Lever) -- the first-ever strategic sale since the divestment process began. A year since then, we have 33 companies on the block. The pace is not that bad. Hence, one should not be disappointed just because some of the proposals made were not discussed.

Even MUL, VSNL, MTNL -- the so-called big-ticket divestment -- too will happen in due course. After all, the government also understands that there is no need for the government to be making cars!

Why is the government going dragging its feet over big-ticket sell-offs?

It is not as if the government can get up one fine morning as say, 'Look we are selling off XYZ company today, any takers?' There are procedures to be followed. There is lot of paper work involved. The market has to be tested, valuation has to be right. The market is not hot right now -- some of our companies have not been evaluated rightly. In the hurry to divest, the government should not lose out.

In effect, you have rejected the German model of privatisation?

Every country has its reasons for adopting a particular model. Germany might have sold 13,500 companies in two years because it was feasible in its economic environment. That may not be the case here.

So, what exactly is happening right now?

A lot is happening, actually. Advisors are being appointed, so that evaluation can be done (the right way), we have asked for proposals on BHEL and a few others. After all, bidders will be invited. It is not that people here are sitting pretty -- there is a lot of work to be done and a lot of it is getting done as well.

Is the oil sector proving to be a tough nut to crack?

Well, the government feels that it should have a presence in some strategic areas, which is a clever idea, too. Hence, what we are looking at is integrating the oil sector -- get the refineries, oilfields and distribution in order. This is a global trend, mind you. I think streamlining should put the slack oil companies back on track.

There is still so much criticism and opposition to divestment. Doesn't this put you off?

Not really. There will always be resistance to change. What these people (those opposing the process) need to understand is that the ultimate goal should be to increase the value of the company and that of the government shareholding. There is no point in sticking to PSUs that are loss-making, inefficient, and command no value in the market.

But even some bureaucrats are opposing it?

That may be the case. Again, it is the instinctive resistance to change. Obviously, the government is not going to turn a blind eye towards the employees of the divested companies. There will be a counter-offer. All of them will not be asked to walk out. I think it is lack of logic that is leading to half the fear and apprehension.

How about a campaign on divestment -- which can create awareness, generate support. Something like the government did with the VRS scheme?

There is no need for this. Most of the important sectors and decision-makers are in support of divestment. So why have a mega budget expenditure -- when the whole idea of divestment is to plug leakages and get the economy going?

Wouldn't privatisation lead to private monopolies?

It is an issue which is being given serious consideration. The government has taken note of such a possibly. This is why the 'competition law' is being drafted. It would not be in the consumer's interest to have such private monopolies. So, even as we divest in public sector companies during this fiscal, these issues will be given due consideration and tackled judiciously.

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