No Choice

Look at the European countries, they are only currently undergoing the process of liberalising their state run enterprises (PSES in India) a la Deutsche Telekom. Ergo, it is not necessary to first undertake the liberalisation process to ensure economic development. Thus, we the leftists, believe that state control over certain areas of the economy should stay.

This argument has the potential of carrying a few Parliament sessions, wastefully. I would like to point out even before this idea strikes the leftists, that it is seriously flawed. For one, it would be naivete to compare our PSEs with their state run enterprises..

Secondly, we must remember that the underlying reasons for undertaking a liberalisation policy between India and the western set of countries is quite different. For countries like Germany, a process of divestment is required to reduce their fiscal deficit, enhance employment opportunities to meet the Maastricht Treaty criterion for the EMU.

India needs liberalisation not as a matter of choice, but as as matter of necessity. We started reforms in 1991, precisely because of this, a crisis is at our doorstep. True, by privatising our PSEs we are also aiming to decrease our fiscal deficit etc. but what is more urgent is the need for funds to carry out various projects promised to the IMF and the World Bank.

For India, privatisation is a remedy, not a matter of choice.