Saturday, July 19, 2014

Arun Shourie says reforms in core sectors can trigger economic growth

 Former Minister Arun Shourie, PTI image
The NDA Government for the first time identified the need to have a Disinvestment Ministry, which was earlier headed by Arun Shourie. During his tenure, he led the selling of Maruti, VSNL, Hindustan Zinc among many others. Even though the Congress-led UPA tried to allege him of misappropriation and some of the senior bureaucrats working with him, almost 12 years later, he came out scrupulously clean, proving that every decision during his tenure was in accordance with the Cabinet Committee and principles of valuation were as per Supreme Court norms.
Not a part of the present Government, his opinion are valued since he has seen the true state of affairs. According to a report published in the Economic Times, the senior BJP leader said that Public Sector Units (PSUs) should be saved by monetising its unproductive assets.
“We must monetise our unproductive assets to save PSUs. During my time (as a Disinvestment Minister), we had discovered that VSNL had 700 acres of prime land in many cities. Now, if unproductive assets like these are sold off, it can generate crores in revenue.”
Speaking on “Instigating Reforms” event organised by the Indian Statistical Institute (ISI) in the city marking the 121st birth centenary celebration of eminent scientist and applied statistician Prasanta Chandra Mahalanobis, he said that there were seven banks in the country which were heavily burdened with Non-Performing Assets or NPAs as they are known.
“Rs 400,000 crore is needed for their recapitalisation. This cannot increase their revenue and nor can their expenditure be decreased,” said Arun Shourie.
According to same report, the former Minister said an Indian corporate house owed Rs 1,22,000 crore to banks while another one owed Rs 58,000 crore.
“India is steadily getting debt-trapped. The situation is so precarious that our leading banks and Public Sector Undertakings (PSUs) are failing to raise money from the market. Immediate and innovative reforms have become indispensable,” he further added.
While putting the onus on States to push for reforms by making legislation using Article 254 which deals with inconsistency between laws structured by Parliament and the State Legislatures, he said, “Everything cannot be done by Delhi. States need to come forward and resort to Article 254(2) of the Constitution that allows the State Legislation to prevail, provided the President gives his assent. If a few progressive States initiate the process, rest will follow suit.”
On rising demand for larger budget allocation for the defence sector, he said the 88 per cent budget went towards paying salaries, pension and other maintenance works. “With this, how we are going to modernise our defence forces and face China”, he wondered.
Commending Rajasthan Government for its initiative, he felt that States should take the initiative to reform archaic labour laws to ensure better prospects for job creation and also alter the Agriculture Produce Market Committee Act so that farmers get better prices for their produce. Remembering how an ineffective UPA and inefficient FCA allowed millions of tonnes of food grains to rot only to be sold at unthinkable prices to breweries.
This he felt needs to change. That can happen if the mindset undergoes a change and we work towards creating an environment that helps economic growth.

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