When the Central Government announced its plan to disinvest its stake in NALCO, there were howls of protest from several quarters, the loudest of them coming from Orissa, the state that houses the public-sector aluminium giant. Going by the stridency with which the Orissa Government opposed the sale of the PSU, which employs over 6,500 people and earned a profit of Rs 409 crore in 2001-2, it looked as though it was wedded to the public-sector. As it turns out, this applies only to its relations with Central PSUs. The state has already started divorcing its own PSUs.

Last week, the state Cabinet cleared the sale of 10 PSUs. "It is a case of better late than never," insists Orissa Finance Minister Panchanan Kanungo who is spearheading the disinvestment of state PSUs. "The PSUs were a colossal drain and too much good money was going after bad money." With only nine of the state's 68 PSUs making profits (34 have closed down following mounting losses and unpaid liabilities), there is little doubt that they have long ceased to be viable ventures. The combined accumulated losses of Orissa's PSUs stand at nearly Rs 2,000 crore.

NO TO NALCO, BUT...

YES TO STATE PSUS

The Orissa Government plans to privatise 29 PSUs by 2005. Cabinet has cleared the sale of 10 units by March 2003. Orissa has 68 PSUs, of which only nine are making profits. 34 have closed down due to losses. Orissa has been a pioneer in privatisation, having allowed private participation in state-owned power companies. But the state opposes Nalco's sale, claiming that it is selling only loss-making PSUs while the aluminium giant is profitable.

Despite the seemingly sound logic behind the move, many trade unions have threatened to take to the streets. "The Government has connived with business houses to rob the state's assets," thunders Janardan Pati, state secretary of the CPI(M). CPI Central Committee member Ashish Kanungo alleges that a "conspiracy is on to rob thousands of workers of their rightful employment".

Unfazed by such criticism, the Government is going ahead with its plans to put another 27 PSUs up for sale. There is unanimity within the Government that privatisation is the only way to save the enterprises from ultimate closure. "The question is whether inaction should result in jobs being lost or whether privatisation should be allowed so that jobs would last," explains state Public Enterprise Secretary Jugal Kishore Mohapatra.

The Orissa Government's enthusiasm has already put the state ahead of Andhra Pradesh in the privatisation race. As against 12,000 PSU employees being offered the golden handshake in Andhra Pradesh, Orissa has extended VRS to over 13,500 workers. "By the end of the current financial year, we hope to be among the leaders in privatisation in the country," says Mohapatra. Why is it then that Orissa is opposed to NALCO's privatisation? The state's explanation for its apparent duplicity is simple: "We are selling loss-making units while NALCO is making profits," says Mohapatra.

Yet, mindsets are changing. Career trade unionists like Panchanan Kanungo and Health and Family Welfare Minister Prafulla Chandra Ghadei are now chanting the privatisation mantra. Appreciation for Orissa's reformist initiative came from the strangest quarter recently-West Bengal. Having advertised the sale of 16 of its loss-making enterprises, the state sent a delegation to Orissa in October to take lessons in privatisation.

Orissa was the first state in India to split its state electricity board into three companies to look after generation, transmission and distribution. It sold 51 per cent of the distribution and 49 per cent of the generation businesses to private investors in 1997.

The state's industrial landscape is littered with case studies. In the early 1990s, the ferro-chrome plant of the state government-owned OMC Alloys in Bamanipal in Keonjhar district presented a dismal picture. Workers trickled in late because there was hardly any work, production was only a fraction of the installed capacity and losses were mounting by the month. Then a dramatic change happened in 1991. Capacity utilisation jumped, productivity shot up and the plant's bottom line crawled out of the red. All this after it was sold to Tata Steel. "A white elephant had been made to dance and finally deliver," explains Amar Jyoti Mohapatra, a filmmaker whose documentary Elephants Can Dance chronicles the turnaround. Unfortunately though, scores of such white elephants continue to bleed an already bankrupt state.

-Ruben Banerjee