`Times have changed, it's not govt's business to be in bread making'

`Times have changed, it's not govt's business to be in bread making'

For almost 23 years, he worked with the BJP without any official post. The years of loyalty and commitment paid off when Arun Jaitley was made the minister for Information and Broadcasting. Now he has the additional charge of the newly created ministry for disinvestment. HARISH GUPTA speaks to Jaitley on his new assignment. Excerpts:

You (the BJP) vehemently opposed privatisation during the (P.V. Narasimha) Rao regime, levelling charges of corruption. Aren't you doing the same?
I think we are doing it in a much more systematic manner. We are not doing it merely for bridging the fiscal gap in the Budget. We have a road map for each PSU in the years to come and then take a decision.

So you are reviewing the overall concept of the PSUs as such?
We have invested more than Rs 2,00,000 crore in the PSUs. There is hardly any return and we are to fund them every year. The other option is to get out. Take the case of Modern Foods. This is neither strategic nor core.nBut when itwas founded, it was aimed at giving cheap bread to the poor.Well, the times have changed. Today, it is not the business of the government to be in (making) bread.

But haven't you moved from disinvestment to privatisation by off-loading the whole company?
The philosophy is that let those in the business of bread and bakery take over Modern Foods. And why shall we burden the tax-payer for a loss-making unit?
In fact, there is no policy of disinvesting only in loss-making units. Each PSU goes to the Disinvestment Commission barring one or two cases. The commission makes recommendations, they are processed by the government. Then, a decision is taken on disinvestment, privatisation, the best manner of it, whom to give and the best price.

You mean it will be on a case-by-case basis?
Yes, it has to be. We cannot offload 100 companies in a single year. The policy is also aimed at attracting private investment. Like private sector can be a player in aviation.

But the concept startedwith disinvesting in loss-making units...
Take hotels, for example. Can we ever take a decision that only loss-making hotels will be disinvested? The basic question is how much is the business of the government to be in the hotel industry.

It is alleged that Modern Foods was sold for a song. The unions have said the company was worth Rs 2,000 crore and handed over to the Hindustan Lever for just Rs 109 crore?
Let the employees get a buyer who is willing to pay even 10 per cent of the price they are mentioning. We will sell it to him. Price evaluations have taken place at various levels. Assets and share value have been evaluated. The company which has suffered losses for the past two years including in the present year, has been able to sell its Rs 1,000 share at Rs 11,000 per share. We would have never got the price in the market. And I have never read this statement from the employees either.

Instead of penalising those who make good companies sick, you are getting out.
Thereis no penalising. I am sorry. This is not the philosophy. It is aimed at withdrawing government equity, go into other areas and attract private investment. This is not based on profit and losses. If you won't sell profit-making units and there will be very few takers for loss-making units.

Do you claim to have streamlined the policy on disinvestment?
No. I will not make this claim. The policy is being evolved. Manmohan Singh started it. The UF appointed disinvestment commission where the GDR route was taken.

How do you ensure that there is no cartelisation?
Well, we will cross the bridge when we come to it. There are sufficient safeguards.

How do you prevent it at a time when global mergers are taking place?
We will ensure that this does not happen.

There are defaulters who have swallowed public money, bank funds and they are coming back to bid?
We will certainly take into account the track record of the strategic partner.

So you will have a strategicpartner?
It depends. There will be cases when we will offload in domestic market. In some other cases, we may take the GDR route. In the third, we may find a partner. In some cases, we may keep the flagship company with us. It will be decided on a case-by-case basis.

How many companies you will disinvest?
We have identified 58 companies.

Have you taken note of the President's cautioning on liberalisation?
The President's speech reflects a very significant concern of the Indian society. I have not the least doubt that those who frame policy are seized of what the honourable President has said.