I’m an unabashed admirer of Arun Shourie for several reasons–intellectual honesty and personal integrity topping the list. In this two-part series, Shourie has given a (fitting) damning indictment of the public sector units (PSU) in India, considered once-upon-a-time, the Pillars of Modern India.

Readers of Shourie’s articles and books are well aware of his meticulous research which precedes their logical conclusions. In this, he reproduces figures from the CAG’s (Comptroller Auditor General of India) audit reports on the affairs of these PSUs.

This (ITDC hotel irregularities, emphasis mine) discovery led us to gather information about other public sector units which we may be asked to handle. We were able to gather preliminary information about 68 of these crown jewels?excluding the hotels. They traversed several sectors, and were in the care of 16 ministries?in a word, a representative lot. It turned out that between these 68 jewels, they had not deposited statutory dues to the extent of Rs 1,578 crore. In addition, they had not paid even the wages of their workers to the extent of Rs 357 crore.

The law says that senior personnel in units?directors, managers etc?that do not deposit what is due towards gratuity etc will be severely punished. The punishment is to extend up to a year in prison. How is it that these organisations?owned and operated by government?had been violating the law in this blatant manner? How is it that no one had ever been punished on that count? What would government have been doing, what would our champions of the public sector have been shouting if these figures related to private firms?

Ha! Don’t we know of the various vultures agencies waiting to pounce even at the slightest suspicion of an irregularity committed by the Evil Private Sector? Don’t we know for instance, that several small scale units bribe power inspectors, health & safety inspectors to get away with several serious irregularities? As also the endless harassment and bribery associated with complying with all kinds of bureaucracy. I can sum this , this result of the Raj Phenomenon in three words: A Vicious Circle.

There is a third law too: the more ??progressive?? the state and its rulers, the more cases we will find in it that document these laws. You have to just think of reforming the work culture of a unit in West Bengal or Bihar, for instance, to say nothing of privatising it, and a howl goes up. Writs are filed. Stay orders obtained. Legislatures are brought to a standstill. Committed journalists add to the din.

Progressive aka Lawlessness and anarchy. And there are always the committed journalists: Praful Bidwai in the forefront. An insider tells me this about Bidwai. The Committed Communist that he is, he has amassed a fortune derogating India, all in the name of the Oppressed.

On another note, I remember, during my school-college days, of listening to “elders” that a government/PSU job was the be-all end-all career a middle class Indian could aspire for. A whole generation was brainwashed by the rhetoric of job security and count-your-salary-at-the-month-end-without-doing-work.

The CAG report on West Bengal for 1999 furnishes data about the state?s public sector units. There are 77 of these?65 of them are government companies, 12 are corporations. Taking share capital and loans together, Rs 10,633 crore have been invested in them. Against this investment of Rs 10,633 crore, the state government received Rs 71 lakhs from two government companies and Rs 2.4 crore from one corporation! Finances of the West Bengal government have been under severe strain for years: even if the Central Government borrows, it has to pay around 10 per cent as interest. As against this, the rate of return from the state?s companies is an abysmal 0.04 per cent! CAG?s report on West Bengal for the year ended March 2001 (p. 15, Volume I, Civil) gives an instructive table in this regard.

And this is the Workers’ Paradise. That is not all. The Workers’ Paradise also happens to top the unemployment rate. For convenience, I’ve given the following picture that tells an appalling story:

And then Shourie exposes another scandal; in his own words:

How very convenient! You can?t borrow. Therefore, you get a corporation under you to borrow. Then, instead of using the amount for the purpose for which that entity borrowed it, the corporation puts it as a deposit with you. And you convert that deposit into a loan to yourself!

An Oscar winning strategy, ain’t it? And it has cost the public several thousand crores. All in the name of welfare, of course. It is no secret that powerful people oppose privatization in a bid to retain control over them, to continue to bleed them and the nation dry. Among other vote banks, trade unions are relatively small but their power is grossly disproportionate to their numbers. Is this strange?

As with so many other things, this bleeding will go on, too what with the Leftists having a major “outside” say in running the government. Manmohan Singh has already announced the closure of the disinvestment ministry, which Shourie had headed during the NDA rule.

Well, it’s back to maintaining the White Elephants again.

Tags: Commentary, General