Privatisation not the issue, control is

There is no doubt that the Left parties will score a major political victory, if the Manmohan Singh government indeed puts in abeyance the Cabinet decision on divesting 10 per cent equity in Bharat Heavy Electricals Limited.

This is not just because a decision taken by the Union Cabinet will have to be rolled back. For, the sanctity of Cabinet decisions has been violated on several occasions in the past.

In fact, the Vajpayee government, too, had put in abeyance its Cabinet decision on privatising National Aluminium Company, succumbing to pressure put by the Naveen Patnaik government in Orissa and trade union leaders in that state.

Since all budget statements are also technically cleared by the Cabinet before being presented to Parliament, even the decision on privatising Indian Airlines announced by Yashwant Sinha in 2001 was rolled back.

And of course, going back further in time, the Rajiv Gandhi government's Cabinet decided to sell off the state-owned Scooters India Limited to Bajaj Auto was also a decision that had to be cancelled later.

Both the Vajpayee and the Rajiv Gandhi governments enjoyed a decent majority in the Lok Sabha. Yet, they took little time to roll back their own Cabinet decisions.

The point is Cabinet decisions are no longer sacrosanct and governments over the years have gone back on them.

That's why, as senior government officials argue, the significance of the Left victory on the Bhel divestment issue does not lie just in the roll-back of a Cabinet decision.

What it has achieved is to widen the scope of influence the Left can now wield over the United Progressive Alliance government.

So far, the unwritten understanding between the Left and the UPA was that the Manmohan Singh government would be given a free hand in areas where there was no need for legislative changes.

In other words, the government could go ahead with decisions such as allowing foreign direct investment in certain areas or raising the FDI limit in certain sectors, because these could be implemented through executive orders.

Thus, the FDI limit in the civil aviation sector could be raised from 40 per cent to 49 per cent through a Cabinet decision, even though the Left parties expressed their reservations.

On the question of raising the FDI limit for the telecom sector, too, the Left's opposition was merely noted by the Manmohan Singh government and then it decided to raise the limit as had been contemplated earlier in the Budget speech.

The Left became a potent force only in areas where decisions had to be implemented through legislative changes.

That is because the UPA government does not enjoy a clean majority on its own in the Lok Sabha and is dependent on the Left parties to get bills passed.

Thus, the Pension Bill could not be passed and the ordinance on the proposed changes in the sector was allowed to lapse simply because the Left parties were opposed to the government move.

This also gave rise to a view that the UPA government would be allowed to proceed with all economic policy changes as long as they could be implemented through Cabinet decisions.

At the same time, emboldened by the Left's political strategy to keep the non-secular BJP forces out of power in New Delhi, the UPA government began toying with the idea of going ahead with some legislative changes as well.

It hoped to work on the Left compulsion of keeping the UPA in power and get some legislative changes through.

That is why the Left opposition to the Bhel divestment surprised many Central government officials.

This was no privatisation and technically, there was no violation of the national Common Minimum Programme either.

But the Left's insistence on rolling back the decision, its decision to pull out of the UPA-Left co-ordination committee and now the possibility of the divestment decision being put in abeyance have questioned the government's credentials as a reform-friendly regime.

What will Prime Minister Manmohan Singh tell investors in the United States, where he is scheduled to visit in a few weeks from now? So far, he could freely take decisions that required only the approval of the Cabinet.

Now, even that is being subjected to a review due to the Left's political pressure!