Seize the moment

Updated: Nov 23 2005, 05:30am hrs
The UPA government seems to have extracted a major concession from the Left parties in selling small portions of equity in profit-making non-navratna public sector enterprises on a case-to-case basis. Less than five months back, the Left parties had decided to stop attending the coordination committee meetings of the UPA on the very issue of disinvestment. Terming the governments plan to go ahead with selling 10% equity in Bharat Heavy Electricals Ltd as the first serious violation of the common minimum programme, the Left on June 26 had said, no useful purpose would be served by attending the coordination committee meetings. Following National Advisory Council chairperson Sonia Gandhis written assurance to the Left that the Bhel sell off plan was suspended, they decided on October 14 to engage in discussions with the government by attending the meetings.

The government must snatch the opportunity thrown up in the Lefts diluted stance on disinvestment, to engage its leaders more meaningfully in other policy issues as well. In the winter session itself, several crucial economic bills, including some sticky ones requiring amendments to the Banking Regulation Act and Pension Fund Regulatory and Development Authority Bill, are scheduled to be tabled. The Left parties have serious ideological differences in the provisions of both the Bills.

While keeping the Left parties engaged in policy-making ensures that the government will not be pushed to brinkmanship, it is also required of the Prime Minister to take a strong position on pending reforms. One such area is the financial sector. The Budget promise of hiking FDI in insurance to 49% needs to be implemented. Also, with banks required to conform to Basel II norms by April 2007, there is a strong need to beef up the capital of public sector banks. Despite the much-talked about consolidation, there has been little movement till date. While the finance minister has left it to banks to take the initiative, action on the merger and acquisition front is unlikely till the ministry involves itself proactively.