Discreet reforms of state PSUs

Mon Jul 17 2006, 00:00 hrs

http://archive.indianexpress.com/news/discreet-reforms-of-state-psus/171332/

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Notwithstanding political compulsions and threats from the "red brigade" supporting the UPA government at the Centre, Congress-ruled Andhra Pradesh (AP) has continued with reforms of state public sector enterprises (SPSEs), albeit, discreetly.

Over the last two years, the Congress government has successfully reformed 27 enterprises including cooperatives, officials said. It allowed the Implementation Secretariat (IS), a nodal agency set up to carry out PSE reforms with the British Department for International Development (DFID), to sell ACC shares held by the government. Also, rural electricity cooperatives have been privatised or merged with the discoms.

The AP State Finance Corporation and eight other corporations were restructured in 2005-06. Besides sugar cooperatives, seven other merchandise cooperatives including Girijan Cooperatives, APCO and Sericulture Federation were restructured.

However, the DFID felt the government was not following up the reforms process and opted out. This led to partial dismantling of the IS outfit, as it was the brain child of the London-based Adam Smith Institute, an advisor to the state.

State finance minister K Rosaiah, who is also the chairman of the Cabinet sub-Committee on SPSE reforms, had said the state was not looking for financing from international funding agencies for PSE reforms. He also said they were not keeping themselves away from the reform process.

True to its professed stance, the AP Cabinet recently approved the Phase III reform programme, covering 30 enterprises and cooperatives over the next three years.

However, allaying the fears of the trade unions, AP chief minister YS Rajasekhara Reddy categorically stated that the government was not willing to sell off viable PSEs or cooperatives. "We are not proposing to privatise the AP State Road Transport Corporation (APSRTC) or Singareni Collieries under the reforms programme," Reddy assured.

"There is a substantial shift in the mindset on privatisation. The issue of ownership is no longer a matter of concern. The viability and future prospects are considered important," says S Mahendra Dev, director, Centre for Economic and Social Studies (CESS).