Sadly, politics yet again took its toll on the economic affairs of the nation as disgruntled allies have once again forced the government to derail the disinvestment programme.

If India is to rule the roost in global manufacturing, the break-up of public sector monopoly and a substantial improvement in the competitiveness of these sectors is inevitable. I have real doubts about the government’s ability to restructure the 227 central public sector units (PSUs). Most of these PSUs are nothing but under-achievers, with performances far below global benchmarks. In such circumstances, selective disinvestment is the only answer or else we will end up carrying these white elephants on our very shoulders.

Political carping should not stand in the way of national interests and it’s time that the Congress-led coalition came forward with bold moves to put public sector reforms back on track.

Labour reforms in the industry too are the need of the day. During my interaction with the Finance Ministry on what the manufacturing industry requires to grow at 12 percent, the Finance Minister, P Chidambaram, was open to the idea of labour reforms provided the industry promises to increase the number of jobs.

But a day later there was a complete U-turn after DMK, an ally of the government, pulled the rug under the government when it threatened to pull out of the alliance if the Centre didn’t shelve the Nalco and Neyveli disinvestment plans. I would even go to the extent to say that it was a black day for the nation.

Stopping disinvestment is going to hurt the country’s economy and if we don’t have the resources we cannot go forward and reforms will not happen.

Monthly Economic & Commercial Report on Mongolia for quarter ending June 2006 giving latest updates on developments directly affecting India's foreign trade and investment.  
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