Political Turmoil May Turn The Clock Back On Orissa Reforms

Bhubaneswar | Updated: Aug 26 2002, 05:30am hrs
Dissident activities in the ruling Biju Janata Dal (BJD), which touched a new high this month, may hit the ongoing reform process in Orissa. As a result, the battle-torn Naveen Patnaik government and an already weak BJD-BJP alliance government have started scurrying for cover.

In fact, the BJD is facing the threat of a vertical split as dissidents have geared up following the protest resignation of finance minister Rama Krushna Patnaik, and the suspension of the three BJD Lok Sabha members from the party early this month. With a large number of party MPs and MLAs hobnobbing with dissident leaders, chief minister Naveen Patnaik, who is also the BJD president, and his loyalists are making a desperate bid to save the party as well as the government.

At a time when Orissa is reeling under the worst-ever financial crisis, Mr Patnaik, who holds the portfolio of finance, has opened the states coffers to appease all and sundry. He is also planning to fill up top posts in PSUs, co-operative bodies and departmental enterprises.

Orissa, which has pioneered power reforms in the country, is considered a fast-track reform state. Following the power reforms, the state ushered in fiscal and governance reforms and also public sector enterprises (PSEs) reforms. The state governments commitment to fiscal and governance reforms has even attracted the attention of the World Bank and the UK-based Department for International Development, which have assured financial assistance for these programmes.

However, the reform programmes are likely to be the first casualty of the current political turmoil. As such, the reform process in the power sector has gone haywire because of mismanagement and corruption. The immediate requirement, therefore, is to discipline the sector. But this is quite unlikely as the state government is busy ensuring its own survival.

The state government had committed to reduce non-Plan expenditure by downsizing the government, doing away with grant-in-aids to educational institutions and restructuring PSEs. The fear that these unpleasant decisions would show the government in bad light and boost the morale of dissidents may now force it to go slow on its commitments.

What is worrying the reformists lobby the most is the recent move to fill up top posts in the public enterprises and cooperative bodies with political persons. Senior BJD and BJP leaders are said to be working out a formula to share the posts among themselves. In the past, too, governments have used public enterprises and the cooperative bodies for political rehabilitation of loyalists and dissidents. In fact, it is this unholy nexus between politicians and bureaucrats that has ruined public enterprises and co-operative concerns.

Out of the total 30 working companies, 34 non-working companies and four statutory corporations, almost all are running huge losses. The PSEs have absorbed government investment of Rs 9,795 crore. In addition, the total amount of outstanding loans guaranteed by the state government is about Rs 4,568 crore. If these loss-making companies continue their operation and accumulate losses at the same rate, by the end of 2004-05, their entire paid-up capital may be be wiped out, cautioned the White Paper on Public Enterprise Reforms, presented by the state public enterprise department.

The cooperative concerns are in no better condition. There are 23 apex cooperative societies, 204 central cooperative socie-ites and 9,434 primary cooperative societies functioning in the textile and fisheries sectors. But most of these enterprises are not even able to generate the minimum cash required to meet their operating expenses and protect the interest of their producer members. With the appointment of political persons, these concerns will become poorer as they will have to bear the salary bills and perks of their top bosses. At present, the top bosses of these enterprises are government officials.