The course of reforms has always been difficult, but never more difficult than at the very beginning. Mr Shourie was a silent spectator in 1991. His party, the Bharataiya Janata Party (BJP), was snapping at the heels of the Congress government and finding fault with every move. If the rupee was devaluated, that was wrong. If cash credit support to exporters was withdrawn, that was wrong. If the agreement on World Trade Organisation (WTO) was signed by India, that was wrong, and it was a sell-out to the developed countries. And so on and so forth.
Nevertheless, successive governments have remained, sometimes unsteadily, on course. The best thing that happened to the CPI and to the socialists was that they got to share power in 1996. Even life-long communists like the late Indrajit Gupta and Mr Chaturanan Mishra saw merit in reforms. A crucial passage on disinvestment was included in the United Fronts Common Minimum Programme. Within months, a Disinvestment Commission was established.
The best thing that happened to the BJP was that it was voted to office in 1998 and again in 1999. Many of the criticisms that it leveled against the reforms of the previous governments simply melted away. The BJP stoutly opposed and defeated the Insurance Bill in 1998, but quietly passed the same Bill in 2000. With people like Mr Shourie and Mr Arun Jaitley joining the Cabinet, the government acquired a pro-reform look.
But all reforms must be based on need and reason. Reforms must also have a context. Above all, reforms must have a purpose or a goal.
In the legal world, there is a principle called Heydons rule. It is also called the mischief rule and it reads thus (i) What was the law before the making of the Act, (ii) What was the mischief or defect for which the law did not provide, (iii) What is the remedy that the Act has provided, and (iv) What is the reason of the remedy
Suitably paraphrased, it will apply to the present situation as well.
I have often praised Mr Shourie in his new avatar as minister. None can doubt his intelligence and capacity for hard work. But Mr Shouries worst enemy is Mr Shourie himself. He is like a horse with blinkers. Once set on a course, he cannot or will not see to his left or to his right. He will not admit that he is liable to be wrong. When he is vindicated he will shower praise on the Supreme Court (the Balco case), but when he is stopped in his tracks he will ridicule the Court and its judgment (the HPCL, BPCL cases), and will go to the extent of inventing arguments that are laughable.
Mr Shourie has been wrong in the past. He was hopelessly wrong when he carried on a no-holds barred campaign against Dhirubhai Ambani. On Ambanis death anniversary, Mr Shourie confessed to doing a 180 degree turn. He was wrong on the Centaur Hotel disinvestment. Some clever people joined together and right under the nose of Mr Shourie robbed the government of about Rs 30 crore. Mr Shourie was wrong in his handling of the telecom dispute between mobile service providers and the fixed line plus WLL service providers. He made some astonishing statements and would have continued in the same vein but for the Group of Ministers bringing some sense and order into the debate.
There are two views on the judgment of the Supreme Court in the HPCL/BPCL cases. The first view is that the judgment is confined to the cases of PSUs created by Acts of Parliament, and all that the judgment requires is that the government should obtain the approval of Parliament fordisinvesting in (or privatising) those public sector undertakings (PSUs). This conclusion of the Supreme Court does not have any alarming consequences.
The second view is that the Supreme Court may have included within the ambit of its judgment all PSUs that have received funds from the Consolidated Fund of India. That certainly puts a spanner in the works, but the spanner could have been removed by a simple application to the Court to clarify that part of the order.
Mr Shouries way of getting back at the Supreme Court is different. He has set his mind on privatising one or more oil sector PSUs and so, if he cannot do it with HPCL or BPCL, he will do it with IOC. This is madness, and there is not even a method in this madness.
The oil sector is the backbone of any developing economy. Many sins were committed in the past using the oil sector PSUs, but there is no gainsaying the fact that the oil sector PSUs are among the principal drivers of economic growth. Ranked by sales, the first five companies in India are oil companies. IOC is at the top with sales of Rs 1,23,628 crore last year. Ranked by profit, the first ten companies in India are in the oil and gas sectors. IOC takes the second place with a net profit of Rs 6,115 crore. Its market cap is between Rs 30,000 and Rs 35,000 crore. It paid Rs 2,299 crore as corporate tax to the government. In retailing, IOC has 8,000 petrol pumps and controls 40% of all retail outlets. It has just teamed up with ONGC for exploration of oil. Its ultimate goal is to become a vertically integrated oil company with stakes in exploration, refining and marketing.
Why would Mr Shourie want to privatise the whole or a part of IOC Who came up with the hare-brained scheme to hive off the retailing activity of IOC and privatising that part Whether in the private sector or in the public sector, IOC has the potential to become one of Indias first truly global companies. ONGC is another. IOC happens to be in the public sector, so why not just leave it there Why take it out of that sector or why break it up into parts
Mr Shourie should realise that in touching IOC, he has landed himself on an oil slick. He is seen as short-sighted, vengeful and pursuing a personal agenda. For his good, I would advise him to say mea culpa and close the IOC chapter. Let IOC move on toward its ultimate goal of becoming a global major.
(The author is a former Union minister.)