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Letter to BS: Privatisation will instil a sense of purpose in management

The economy has to move forward in keeping with global trends

Business Standard 

Govt gears up for divestment drive
Illustration: Ajay Mohanty

This refers to “Govt will exceed divestment target: Rajiv Kumar” (July 10). Although divestment exceeds budgetary targets, it is coming at a time when the economy needs to stress on stability and progress. Increased privatisation will instil a sense of purpose in management with firmly laid budgetary targets and profit orientation. The economy has to move forward in keeping with global trends and long-term budgeting will not be swift considering the changing economic and commercial trends. It will require reallocation and revisions at regular intervals.

However, this does not mean that the government control and functional role should be compromised. A policy laying down the return on available economic resources is equally important. This will generate public funds through efficient private activity. Labour is a contributory and not an isolated function and revised labour laws should ensure greater involvement in corporate growth. Thus, labour laws will have to be less rigid with discretionary powers of management not being compromised while simultaneously preventing misutilisation of powers by either side. This should be in line with corporate requirements and create a participatory bond between labour and management. Labour and management relations should be free of friction, less coercive and more amicable.

Coming to taxation, corporate earnings should be less expenditure prone if they are already in possession of government land. Too much external borrowing may work negatively as their investment in the economy might become more intrusive and interfere with policies. This will compromise our international image.

C Gopinath Nair, Kochi

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First Published: Wed, July 10 2019. 23:15 IST