Dr Shouries Questions

Updated: Sep 20 2003, 05:30am hrs
Being a conscience keeper for the judiciary is not a new role for Union disinvestment minister Arun Shourie. Last year he published a learned tome drawing attention to many inconsistencies in judicial pronouncements. One can see a new chapter being added to the next edition of his book with the Supreme Courts recent judgement on the question of disinvestment in public sector oil companies. Dr Shourie has raised a pertinent point regarding the relevance of the Courts views for earlier disinvestment and privatisation decisions of both central and state governments. The critical observation with respect to the view taken by the court about the applicability of its present judgement for the Maruti case is particularly sharp and deserves a response from the judiciary. Dr Shouries poser raises a far more important issue than one of procedure in the extant case of oil PSUs. This larger question is whether the highest judiciary of the country, beyond which there is no further appeal save Parliament, can take a purely legal and procedural view on matters pertaining to the normal functioning of the economy and of markets.

The Supreme Court judgement has not only delayed economic reform in a critical area like the public sector, but it has also increased uncertainty with respect to investment decisions in India. The art of management in a modern economy is about reducing uncertainty and increasing predictability and stability in public policy. Judgements such as the one in question can impact on individual fortunes as much as on the collective fortunes of the economy and the nation. If the error on the part of the executive was particularly gross and motivated, a rap on the knuckles is understandable. However, where the lapse was procedural and the intent was benign, the Court could have taken a less legalistic view and a more macroeconomic view. One way for the government to end the uncertainty now created is through an initiative that brings the Union government and all state governments together, enabling a consensus on privatisation. This will speed up the legislative correction now needed for further movement on divestment. An early political consensus can undo the damage inflicted by the judiciary on the privatisation process.