He has shrugged off the objection that the transfer of equity to IOC would not amount to privatisation, pointing to the fact that cross-holdings were resorted to last year among the public sector oil companies as part of the disinvestment programme. The arguments pro and con raise fundamental points about the objective of disinvestment. Ramakrishna says that the objective should be for the government to get the highest value for its shares. There is also the collateral argument that public sector units should not be barred from expansion through acquisition merely because they happen to be publicly owned. That would hobble them, resulting, among other things in the government getting a lower value for its stake in them, at alater stage in the disinvestment process. On the other hand, the argument that acquisition by the public sector is not privatisation is also correct.

The issue ultimately is whether we are looking at disinvestment or privatisation. There is hardly any need to reiterate here the disadvantages of state management. Hemmed in by arcane rules, pulled up by inane government auditors, and browbeaten by politicians and bureaucrats, the public sector environment prevents managers from performing. This is amply evident from the fact that these very same managers do very well in the private sector.