Privatization has become the keyword for the government which eyes opening the economy further to bring in more competitiveness. In an exclusive interview with Prasar Bharati one of the most vocal advocates of privatization Ravindra Chandra Bhargava, Chairman Maruti Suzuki Limited throws light on why privatization is the way forward for progress and prosperity?
“If the objective of a public sector company is both industrializing and creating an equitable socialistic society then the chances are that neither of these objectives will be achieved,” he says.
“While opening the economy not only Indian companies but foreign companies also have been given a favorable chance to invest in the country. We have a very clear policy regarding inviting FDI into the manufacturing sector,” he adds.
“We have been trying to attract FDI since 1991. In fact, the Foreign Promotion Investment Board was also set up at that time. But the FDI targets failed as the manufacturing sector in India in those days was not very competitive. We have continued with the public sectors so far. But now the government is taking the game-changing position to privatize,” according to him.
“In the areas like atomic energy and space, I can understand the government’s position to have PSUs because in many ways these are not commercial enterprises but for different purposes. But even in these enterprises, the private companies can help the PSUs in finding ways to work more efficiently and more effectively,” he notes.
“Now, look at the sectors in which competition is allowed between private and public sector undertakings. Take for example the telecom sector, what has happened to the public sector undertakings like BSNL and MTNL, or take airlines what happened to Air India. You even take for instance the hospitality industry what has happened to the ITDC hotels. These all entities require government tax support,” he points out.
“In India given our political and social situation, we need to have a model of growth which is much more inclusive and much more equitable that is where the Japanese model of growth fits in. The western system of growth creates a huge disparity between the top and the lower end of the society. It’s wrong to think that if America and Germany can do it in a particular way then we should emulate them,” he highlights.
“Why I advocate the Japanese model is because it is a very socialistic country. In India, if we want to maximize the competitiveness of the industry then the leaders of the private sectors must understand that the optimal result could be obtained if they also create in their management structure a way in which the employees get included. If the benefits of the growth are shared then there is interest among the workers and the associates for furthering the interest of the company,” he adds further.