After making a complete hash of disinvestment this year, and collecting just Rs 13,344 crore so far against the FY16 target of Rs 69,500 crore, the government is said to be re-looking its strategy and may, once again, consider the privatisation route. There is even talk of setting up a Disinvestment Commission that was, at the time of the Vajpayee government, used very successfully to both divest shares as well as privatise firms. A total of two Disinvestment Commissions were constituted since 1996 and, between them, they submitted 24 reports on 95 PSUs that, in some cases, recommended privatisation and, in others, selling part of the government stake in PSUs. Once the UPA came in, and decided against privatisation, the Disinvestment Commission was wound up since the government decided to go back to the old way of selling shares of companies without any change in their management. Getting back the Disinvestment Commission, to that extent, will send out a positive signal, particularly if privatisation is part of its mandate.
Other than that, it is a waste of time. There are enough reports on what needs to be done in most PSUs, and how many of them just cannot be revived. The government simply has to take a call on whether it wants to privatise a unit or not; and if not, are shares to be offloaded to fill up the deficit. A suitably strengthened disinvestment department is perfectly capable of doing this and can, if need be, get help from professional firms in the case of specific PSUs—once this decision is taken, the rest of the process is, in any case, handled by lawyers and merchant bankers. The problem today is that the government continues to throw good money after bad in many PSUs—will it stop this if a Disinvestment Commission says it is better to sell off the unit? In the case of others, as in the past, the governnment continues to persist with the fiction of terming LIC buying shares of a PSU as disinvestment; indeed, from what news reports suggest, certain PSUs are to be asked to buy back their shares and this, too, is going to be counted as disinvestment. In other cases, like the sale of the residual shares of HZL, what is needed is a strong team to argue the case in the Supreme Court and to ask the Chief Justice of India to expedite the case. Similarly, in the case of SUUTI, the government does not need a Disinvestment Commission to tell it that selling the shares is a good idea. What’s missing is the will to divest, not the lack of plans on how to do so.