Red vanguard

Updated: Nov 17 2005, 05:30am hrs
CPI-M chief, Prakash Karat, recently said the correct way to reform state-run enterprises is being shown by his partys government in West Bengal. Wednesdays decision by the state cabinet to privatise Kolkatas Great Eastern Hotel is an appropriate occasion to hold him to his words and to also reflect on what that version of reforms with a human face involves. It is 30 years since the state government decided to take charge of the historic hotel. Despite its reputation and the fact that it is on five acres of land in the very centre of Kolkata, the place hasnt shown a profit since; the annual losses mounted, to around Rs 4 crore a year. The government has been trying to persuade the workers unions since 1994 to take a generous severance compensation; the present round is the fourth formal attempt at divesting, each time with more sweeteners thrown in.

The state commerce and industry minister says theyre giving each of the remaining 400-odd employees around 90% of the present value of what they would have earned till their retirement, paying health insurance costs for their families and also bearing the cost of retraining one family member for a new occupation. It is interesting to note that the workers still refused: the difference this time was that all the Left unions were arm-twisted and the government decided to press on. Unlike many a PSU run to the ground, there are buyers: private hoteliers cant see the problem in making a prime-property hotel pay.

West Bengal has around 70 loss-making companies run by its government even after years of supposedly serious restructuring, in which eight units have been closed. This should prompt hard questions on how long and how far taxpayers should bear the burden of socialist follies, while Left politicians try their hesitant experiments in rationalising. Yet, the ruling Marxists did persist in getting rid of GEH and have closed some other loss-makers, while saying they want the private sector to take majority stakes in two dozen others, to begin with. It is more than Mr Karat and his theoreticians will allow in Delhi. They owe us an explanation.