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When
Jawaharlal Nehru created public-sector enterprises they were intended
to be the "temples of modern India". Today they are its cesspools.
When his daughter Indira Gandhi nationalised banks in 1969, it was heralded
as a revolutionary move to banish poverty. Socialism was the rage of the
day and people believed the public sector was for public good. Politicians
capitalised on this by getting the government to run a range of businesses
from insurance to taxis amounting to a total public-sector investment
of Rs 3,03,400 crore—17 per cent of the GDP.
The only people who benefited were politicians and bureaucrats who were
able to wield enormous power. This unholy conspiracy has robbed the nation
of thousands of crores of rupees through corruption, incompetence, negligence
and even downright fraud. Today if anyone even suggests that anything
be nationalised, the general public is horrified, knowing that it means
shoddy products, poor service and mounting losses. It's not surprising
that there is no resistance to disinvestment. The protests come only from
politicians and bureaucrats who have a stake in these continuing to be
under their control.
We hit upon our cover story only by accident when Senior Editor Rohit
Saran was researching disinvestment case studies. It is a good example
of the havoc government control can create for a business. The company
in this case was India Tourism Development Corporation set up in 1965,
the heyday of socialism, to promote tourism and act as a leader of our
hospitality industry.
Saran discovered that ITDC had turned into not one but an entire herd
of white elephants; its flagship in Delhi, Hotel Ashok, has piled up losses
of Rs 28 crore in the past three years and its occupancy rates in 2001
were just over 30 per cent. Ashok's is not the worst scenario in the 26-hotel
chain. Says Saran: "From a showcase of India's hospitality, ITDC
became a symbol of public loot." There couldn't be a better example
to show that faster the disinvestment, the better it will be for all of
us.
(Aroon
Purie)
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CURRENT
ISSUE JULY 15, 2002
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