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WHY POLAVARAM PROJECT NEEDS TO BE ADDRESSED AMICABLY

The Polavaram irrigation project has run into several problems due to a poor understanding of the Andhra Pradesh Reorganisation Act and a stalemate between the state and the Centre. The government needs to put the state’s interests ahead of its own, so that the project gets completed.

Dinakar Lanka

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The Polavaram irrigation project is a multi-purpose benefit project with the full capacity of 194 tmc and a utilisation capacity of 175 tmc and this project is the lifeline of Andhra Pradesh. The project will irrigate 23.20 lakh acres in the state, serving drinking water to millions of people in all 13 districts. The project will bring multiple benefits directly to the districts of East and West Godavari and Krishna, besides fulfilling the drinking and industrial needs of Visakhapatnam with a total of 322.73 tmc, including 80 tmc for diversion to the Krishna River, in addition to 23.44 tmc for Vishakapatnam, and generating 960 MW of hydel power, as per the approved DPR.

The Polavaram multi-benefit project was delayed due to a lack of political will and government inaction. There was a need to pay special attention to Polavaram at the time of the partition of Andhra Pradesh, as part of which the Polavaram Irrigation Project was designated as a National Project under Section 90 of the Andhra Pradesh Reorganisation Act.

The allegations against the Polavaram project are rapidly attempting to sideline the facts by giving more importance to political accusations and present a case of political parties pursuing political interests rather than state interests. Such an attitude of political parties leads to further procrastination and damage to state interests.

This problem can be resolved only by understanding the following points in toto:

i) Section 90 (i), (ii), (iii) and (iv) of the Andhra Pradesh Reorganisation Act gazetted by the Central Government on 01 March 2014.

2) The fourth point of the statement made by the then Prime Minister Manmohan Singh in the Rajya Sabha on 20th February 2014.

3) The fourth para or item in the Special Financial Assistance Declaration by Finance Minister Arun Jaitley, dated September 08, 2016.

The implications of these three factors together give an idea of the extent to which anyone has a role to play in the Polavaram project, from which a plan to overcome the current stalemate is necessary in terms of state interests.

It is wrong for the heads of government in the state at present attacking the government in the past, that had compromised on the Polavaram project by accepting the irrigation component against the interests of the state. The head of the government prior to the existing state government is quoting that they had approved a DPR of Rs 55,000 crore from the Central Government and is giving the impression that the total cost will be borne by the Central government which is untrue. The fact is that at the time of the partition of the state, the Central government had declared the Polavaram Irrigation Project as a National Project, stated that the Central government was committed to completing the irrigation component of the Polavaram Irrigation Project, said that the Polavaram Irrigation Project has been deemed to be approved by the state of Telangana and that the Central Government has informed that the project was being constructed and approvals would be obtained from the Department of Environment, Forestry and Land Acquisition and Rehabilitation Regulations. Considering all these factors, it is a fact that under Section 90 of the Andhra Pradesh Reorganisation Act, the Central government’s assistance extends only to irrigation component for the Polavaram Project as it had been legitimately recognised as a National Project. It should be closely analysed whether the Central government has a responsibility to get the permissions and approvals as per the rules relating to the Land Acquisition and Rehabilitation.

The mere mention of the approvals in the Andhra Pradesh Reorganization Act has cast a blue cloud over the financial adjustment in this regard. Every project, whether National or State, should obtain clearances and permissions from the Sub-Division of Land Reforms, functioning under the Land Resources Department under the Central Rural Development Department. The project should be carried out only after obtaining approvals as per the provisions embodied in Chapter 1 to 9 of the National Rehabilitation & Resettlement Policy, 2007. These permissions are mentioned only under Section 90 of the Andhra Pradesh Reorganisation Act but there is ambiguity in the reference to the financial resources available.

On 20 February 2014, under pressure from MPs and intellectuals, the then Prime Minister Manmohan Singh made six statements in the Rajya Sabha. The fourth item read, “We will amend the Act as soon as possible so that the Central Government can bear the cost of assistance and rehabilitation related to the Polavaram project, but has this amendment been made to Section 90 of the Andhra Pradesh Reorganisation Act? Has anyone so far requested the Central government in this regard as it deems necessary?” If it is a matter of insignificance, why did the then Prime Minister make a statement in the Rajya Sabha? Can the Central government adjust the cost of assistance and rehabilitation without amending the existing law? Without amending the law in the present circumstances, it is rare for a state finance minister to receive funds beyond the limits mentioned by the Union finance minister, as has been reported in the press. It is also unreasonable to argue that the present state government has squandered that amount of funds as the DPR for Rs 55,000 crore has been approved by the Union Ministry of Water Resources without considering these factors. The fact is that the DPR for the entire project (including irrigation, drinking water and electricity) should be submitted to the Central Government for approval by the State Government, no matter what percentage of the funding is the responsibility of the Central Government.

After several rounds of deliberations between the Central and State Governments, the then Union Finance Minister Arun Jaitley on September 8, 2016 addressed a number of issues under the Special Financial Assistance, the fourth of which was a clarification on the funding for the Polavaram project, stating that the irrigation component after 1.4.2014 would be paid at 100% of the rates as on that date. Apart from this, at the request of the state government to execute the Project on behalf of the Central government, it was proposed to construct the project for speedy completion. Here it is important to clarify the financial aspects of the project that had forced the state government to accept by compromising the extent of funding up to the irrigation component only rather than the entire project cost.

It should be noted that Section 90 of the Andhra Pradesh Reorganization Act is the only source for anyone to say anything about this project in connection with the Union government, and changes in it are only possible through an amendment to the law, if additions are required. Also, the Polavaram Project Authority is supervising on behalf of the Central government in such a way that the State Government is responsible for the execution of the project. Those who wish to criticise should first understand the provisions of the Act and the agreement reached between the Central and State governments to implement those provisions. The Central government maintains full transparency in the release of funds for the Polavaram Irrigation Project, reimbursing the expenditure incurred by the state government only after an audit of the Polavaram Project Authority. So far, the total funds released by the Central Government after the Polavaram Irrigation Project has been recognized as a national project is Rs 8,614.16 crore, of which Rs 7,664.16 crore has been released by NABARD. Subsequently, a further sum of Rs 2,300 crore has been released. There has been criticism of the funds released by NABARD but they are purely political in nature and far from the reality. The burden of the funds released by NABARD is on the Central government, not on the State. The Central government should legitimately release the funds to the state but the matter of how the Centre will provide those funds is unnecessary as it is their responsibility.

However, the impact of political criticism over the past six years, especially on the cost of rehabilitation and resettlement, has given rise to suspicious propaganda about every development that takes place at present on the Polavaram Irrigation Project. In particular, in the past, the Opposition has accused the Polavaram Irrigation Project of being completely corrupt in its expenditure and rehabilitation and resettlement cost estimates. But, the present head of the state government, after it came to power in 2019, hasn’t provided any evidence of the charges made when they were in the Opposition, ironically requesting for funds as requested by the previous head of the state. The present head of the Andhra government is requesting the Union to disburse funds as per the DPR of Rs 55,548.87 crore, where Rs 4,124.64 crore is for hydel power, Rs 18,256 crore is for irrigation and drinking water, and Rs 33,168 crore for rehabilitation and rehabilitation at the 2017-18 prices. It is a fact that under Section 90 of the Andhra Pradesh Reorganisation Act, the cost of hydel power and drinking and industrial water is not included in the funds to be provided by the Central government and the State government. The reason behind the present situation is a lack of clarity on the increase in the cost of rehabilitation and resettlement which needs the implementation of the Land Acquisition and Rehabilitation and Resettlement as per the 2013 Act for the remaining part of the Land Acquisition post 2014. Apart from this uncertainty, Section 90 of the Andhra Pradesh Reorganisation Act lacks clarity on the cost of rehabilitation and resettlement. All these factors became obstacles for the Polavaram project and complicated the problem.

The revised cost estimation by the committee constituted by the Ministry of Finance has approved the revised DPR of the Project for Rs 47,725.74 crore at 2017-18 prices. As per reasonable appraisal to complete the irrigation component of the project, approximate funds required are:

i. Power Houses: (Rs 4,124.64 crore as recommended by the committee), but after appointment of cost of water supply: Rs 4,560.91 crore

ii. Drinking water and industrial water for Visakhapatnam: Rs 7,214 crore

iii. Cost incurred prior to the state bifurcation: Rs 5,135.87 crore

The net cost of the project for the Union Government is Rs 30,814.96 crore, out of which, the amount already reimbursed by the Union Government is Rs 11,000 crores, approximately. Hence, the balance expectation would be around Rs 19,000 crore at the revised cost at 2017-18 prices. But, as per the Union government assistance is concerned, it has limited the project cost of the irrigation component at 2013-14 prices only. As per that, the revised project cost is for Rs 20,398.61 crore, at 2013-14 prices, out of which the cost incurred prior to the state’s bifurcation was Rs 5,135.87 crore and the Union government’s reimbursement to the state government for Rs 10,916 crore after 1.4.2014 shall be deducted. Hence, the balance responsibility as assistance for this project from the Union government would be around Rs 4,300 crore only as per the Ministry of Finance.

Political parties today need to understand the facts of the Andhra Pradesh Reorganization Act, reasonably consult with the Central Government, get the necessary funds, and think realistically, instead of accusing each other for political gains. They should also keep in view the financial situation of Andhra Pradesh. State spending and unproductive expenditure on ‘navaratnalu’ (freebies) are also matters to consider for the Union Government after the appeal made by the head of the Andhra government. The completion of the Polavaram Irrigation Project should also avoid falling into the trap set by provocateurs.

The only task ahead for the State Government now is to patiently and accurately estimate the rehabilitation and resettlement cost of the Polavaram project’s irrigation component and explain properly how the assistance provided by the Central government so far will be in vain if the project is not completed. The only way to do this is by presenting reasonable facts and sorting out the problem amicably. For this, cronyism will be useless and the idea should work only on the basis of state interests. It can make two proposals: one to convince the Central Government that the cost of rehabilitation and resettlement in the irrigation component are included, or request making necessary amendments in the Andhra Pradesh Reorganisation Act to adjust the cost of rehabilitation and resettlement as per the fourth point in the statement of former Prime Minister Manmohan Singh in the Rajya Sabha. The only way now is to convince the Central government through consultation with it because many of the shortcomings that are not apparent in the Andhra Pradesh Reorganisation Act have turned into curses for the project.

The author holds a B.Com and is an FCA. The views expressed are personal.

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Tushar Mehra & Mallika Puri, Co-Founders, Talentopedia on digitizing India’s freelance economy

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In an exclusive conversation, as a part of NewsX India A-List, Tushar Mehra and Mallika Puri, Co-Founders of Talentopedia spoke about their venture and the importance of focusing on digitizing India’s freelance economy.

In his inaugural comments, Tushar Mehra said, “At Talentopedia, our aim is to digitize the Indian freelance economy and we are doing that by giving an app to freelancers to help them better manage and grow their businesses. There are about 20 million freelancers in India, despite that big number most of freelancing happens offline. The best way to grow your business is not to sell your services on online markets, the best way to do it is to get work through first degree networks.”

Joining the conversation, Mallika said, “I have been a freelancer myself, I’ve worked in the industry for 5-6 years. I have personal experience with respect to being a freelancer and the challenges that we ourselves faced. I have tried to generate business as a single army through online platforms like freelancer.com, fiveearth and I could never generate any business because I would spend my prime hours of working on online platforms just to generate business.”

“I realised these platforms are not build for freelancers and people like myself, they are built for buyers where they come on board, generate as many leads, whereas, the freelancers are just on the platform to bid for those leads that are coming on board. But we are constantly cost-cut, facing a lot of challenges with various different freelancers who are verified by the platform. Thus, we land up with zero work. So, we’d rather switch to offline channels through first degree networks to get our own business and manage work. That’s how Talentopedia was born. So, that we could cater to the freelancers first, make them our focus, focus on their challenges and then cater to the buyers,” said Mallika.

Commenting on how Talentopedia is set apart to help freelancers apart from helping and creating a market place, she added,“Freelancers are our prime focus, they are our customers. We look at providing them business-management tools through our application that helps them to manage their business, generate leads and also grow their business.”

Explaining how Talentopedia works, Tushar stated, “We have an application on the google play store. We have a portfolio to upload projects freelancers have done, list their skills and services they sell. You can even input reviews you get from Facebook and other platforms. You can use our payment links to get easy payments like UPI (Unified Payments Interface). If you are working, getting clients offline through your first degrees, use our tool, manage those clients.”

Recalling their journey so far and future plans for Talentopedia, Puri said, “The journey has been absolutely amazing, we have around 100,000 freelancers on our Android app. In next five years, we want to see 10 million freelancers on our app. We want to create job opportunities for people who are looking at freelancing as their source of income in the pandemic.”

Towards the end, Tushar added, “If you’re a freelancer, this is the perfect time to join our platform and start growing because with the pandemic, a lot of start-ups have recently started to hire freelancers as they have realised the power of freelance.”

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“Got a lot of opportunities from global companies after Atmanirbhar Bharat initiative”: Raj Chodankar, Chairman & CEO, Rrps4e Innovation Pvt Ltd

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Raj Chodankar

NewsX was recently joined by Raj Chodankar, Chairman & CEO, Rrps4e Innovation Pvt Ltd for a candid conversation with in its special series, NewsX India A-List.

Raj kickstarted the conversation by sharing insights from his experience in the electro-optics and healthcare industry. He said, “Our journey actually commenced in the year, 1990, that’s when we first ventured into doing some sort of business in India, but, the real assignment that we took up was in 2001 when we built up a very unique nano-machining facility, one of its kind in India, which catered specifically to the nuclear fraternity. So, that was the platform which took us into electro-optics because most of the optical elements that go into an electro-optics need the nano-machining setup and that’s where our journey began in 2010-12.”

He further added, “2014 was when we did a really good job for the Indian army as an outside partner with an Israeli company where we built all the optical elements for thermal imaging fire control system which gets mounted on a tank that is where we started getting recognition and our journey then progressed into trying to offer complete products rather than only components because there was a lot of value addition in the products.”

Throwing some light on their journey further, Raj expressed, “We got very prominent in 2018-19 and we were recognised well. 2020 was the time when we diversified into healthcare and it was only because of the challenges that the entire world was facing due to the pandemic. Because we had this thermal core technology which was the base, we used that thermal core technology to build thermal scanners for fever detection and then we use this thermal camera jointly with a Japanese company.”

Further talking about their collaborative projects in India and PM’s Atmanirbhar Bharat initiative, he said, “The era of making India Atmanirbhar is something that has always encouraged us and it continues to encourage us, or else life was very difficult for any entrepreneur to display his skills or innovation because at the end of the day we have to remember that if we are going into some niche technologies or products that go into Indian army, it is very important that these products go through some extensive trials and these trials by default can be anything between 1.5 to 3 years. The use of the Atmanirbhar plan under Make In India plan allowed us to buy technologies from global companies which made the buyers life much more simpler because  it was a proven technology, and, we could then display our skills because the global technology provider will allow us to build 50 per cent of those modules or components in India which we call as the indigenously designed, developed and manufactured in India, the IDDM category.”

Towards the end of conversation, Raj shared about their global tie-ups. He stated, “After this Atmanirbhar setup, we got a lot of opportunities from global companies that wanted to partner with somebody who is already a part of the ongoing technologies and which is where we got an upper hand over the others. Not that we are of corporate level, we are just getting into corporate zones. We are doing really well, our growth pattern is going into constant jumps.”

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“We want everyone who follows and wears the brand to be love generation”: Founders of LoveGen

Founders of LoveGen, Bhavana Pandey, Nandita Mahtani and Dolly Sidhwani joined us on our special series and shared with us the idea behind the brand and their experiences.

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In an exclusive interview with NewsX India Alist, Founders of LoveGen, Bhavana Pandey, Nandita Mahtani and Dolly Sidhwani joined us on our special series. LoveGen is a brand that is uniquely tailored to meet the taste of an adventurous young generation who love to enjoy life and are interested in fashion, music and social media. LoveGen allows both young men and women to express themselves through clothes at every occasion.

Bhavana shared with us the idea behind the brand and said “All three of us have been friends for almost 20 years now. Fashion and marketing was something that was common between the three of us now, Nandita has been a designer for many years and Dolly had a brand and comes from an export background. I had a bit of marketing experience in fashion. Over many of our conversations, we realized that we don’t have fast fashion Indian brands which can be spread over all age groups and something comfortable.”

“That’s how the idea came about, and three of us were pretty much on the same page with it and we just decided to go for it and finally execution happened quite quickly,” added Bhavana.

Nandita Mahtani shared with us about the coming of the brand together and said “This is something that we all individually wanted to do and it was just about finding the right people to do it with because to start a new brand on this level is not an easy job. The three of us connected and our synergy was great and there was no turning back.”

Dolly Sidhwani talked to us about the thought behind the brand’s name and how LoveGen wants everyone to be loved. “We wanted to create a community about love, and there was a lot of hate around the world right now. We want everyone to be about love and everyone who follows us and wears the brand to be love generation,” said Dolly.

With so much prior experiences in the world of fashion and design, the founders elaborated on the USP of the brand and what sets it apart from others in the market. “Right now we are very focused on denims and what is really different about our brand is that it is very relaxed and at the same time it’s very glamorous and simple and interesting and it’s very cool and this is what sets it apart. A lot of our design elements come into play from our travels and whatever we carry back from our travels,” explained Dolly.

Renowned fashion designer Nandita shared her experiences working on that brand and said “LoveGen is a very affordable brand for everyone and it was very exciting to design. We have a lot more styles for every season and it’s more sort of interesting for the younger generations.” “We wanted more mass appeal so there was a lot of more scope,” added Nandita.

Throwing light on the journey of the brand in the wake of the pandemic and turbulent times, Bhavana told us “The last one and a half years, people have been through so much. We were fortunate because we have got partners who’ve invested in the brand. They were really supportive with us and the three of us been like very strong about it. We made sure to keep that our employees, our people are loved as much as we could. And we’ve kind of waded through this whole time together.”

Adding on how they are looking at the positive side, Bhavana further added “Our store in Malad, which is the Inorbit Mall has opened again and two more stores in Indore. We’re looking at opening more stores this year. We have started our brand online as well so we’re getting a lot of eyeballs on LoveGen.com.”

Talking about the emergence of digital marketing and sales, Dolly added “Social media is a huge part of our world but somehow I think there’s always going to be a balance between brick and mortar and digital. It is going to be a lot digital going forward but we are also planning to open 30 to 50 stores in the next two years.”

On an ending note, the founders of the brand advised their fans and viewers to never give up on dreams and follow their dreams and do what they love.

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I never thought that I would ever going to be part of Hungama 2: Meezaan

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After making his debut with Sanjay Leela Bhansali’s Malaal, Actor Meezaan is all set to carve a space for himself in the hearts of audiences with Hungama 2 on Disney + Hotstar. The young hearthrob recently joined NewsX for an exclusive conversation as part of NewsX India A-List and spilled the beans on ‘behind-the-scenes’ hungama.

Reminiscing memories from the release of earlier ‘Hungama’, Meezan said, “I was actually 8 years old when the movie had come out in 2003. I remember going to Globus theatre in Bandra and watching it with a friend of mine and his mother. Ever since, even when the film comes on TV, we watch it till date. Sometimes while scrolling through the channels, suddenly we see Hungama, we always stop by for those iconic scenes. I never thought that i would ever going to be part of Hungama 2 about 18-19 years later. It has been a surreal experience for me. I am just grateful for this opportunity that has come and working with the people who are working on this film.”

On his full-fleged entry into the comedy genre, a genre in which his family has made a huge mark and their reaction to the script, Meezaan said, “The funny thing is that there was no script. There was just a name. I got a call saying, ‘Will you do a Priyadarshan film?’, and I said, ‘Ofcourse, yes’, without any hesitation because it is Priyan sir and it is honestly an honour to be working with him in my career. It is my second film and i am thrilled to get this opportunity and it has turned out to be amazing. I can’t wait for people to finally see the movie.”

Speaking about his experience of working with Filmmaker Priyadarshan and Actor Shilpa Shetty, Meezaan expressed, “It was a surreal feeling because there are too many things that are working in favour of this film, in terms of putting the film together. There is Priyadarshan coming back after a long time. There is the title, ‘Hungama’, which is a big franchise. The producers- Venus, Ratan ji had launched Shilpa Shetty and had done movies like Khiladi, Baazigar and so many other iconic films. You have the starcast, including Paresh ji, Rajpal sir, Johhny Lever, Ashutosh Rana- so many veteran actors. They are amazing at what they do. At the same time, there is Shilpa Shetty as well, who is making her comeback. There is also this song, ‘Chura Ke Dil Mera’, which is an iconic song and she is in the original song. I am with her in this remake. It’s too much that is going on. There is a lot of Hungama happening as it is. I am very happy. It has turned out to be wonderful.

“I am glad i made so many friends, including Shilpa ma’am. She is a wonderful person, full of life. I think she is aging in reverse. She is looking wonderful in the song. She has absolutely killed it. Till date, she has maintained the same energy, same dedication, same work ethic. I’m actually inspired by her and it was a lot of fun working with so many people, ” he added.

Sharing the response he has received for the song, ‘Chura Ke Dil Mera’, Meezaan said, “It has been great. People have loved it. They showered their love, whether through social media, YouTube and stuff like that. It has been great. I have no complaints and it is still going on. There is a lot of Hungama still to be done. We’re taking it one step at a time. There is one more song that came out after, which is called, ‘Chintan’. That song also has received a lot of love from people everywhere. Now we have other song coming out, which is the Hungama title track. It is going to be wonderful and i am excited for everyone to see the whole film as it is.”

Check out the entire interview on NewsX YouTube: 

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IDEA BEHIND DAMROO IS TO SUPPORT INDEPENDENT MUSIC: RAM MISHRA

In an exclusive conversation with NewsX India A-List, Ram Mishra, Founder and CEO, Damroo App, spoke about his app and how it promotes independent artists and their music.

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Ram Mishra spoke about collaborating with singer Kailash Kher and BJP leader Dr Sambit Patra and how his app promotes independent artists and their music. Talking about the collaboration, Ram said, “I am thrilled about the song ‘Shri Jagannath Ashtakam’, composed and sung by Kailash Kher and Dr Sambit Patra. I am thankful to them and excited to release this song exclusively on the Damroo app. It is a beautiful song about Lord Jagannath. For those people who are not able to attend the Jagannath Yatra this year due to the pandemic, this song is for all of them. Those who don’t like spiritual songs should listen to this one. It is going to fill your mind and heart with energy.”

On being asked about his app, he said, “The idea behind this app is to support independent music and non-film music. There are a lot of digital platforms and apps, that are promoting International and Indian music but this is the only platform that promotes independent music and non-film music. We also kept in mind that a lot of people want to listen to regional music- be it Punjabi, Odia, Gujarati, Assamese, Rajasthani, Bhojpuri or anything else. This platform will provide them with all of this. Just one click and they will be able to get their choice of music. We have songs in more than 20 languages and are also collaborating with regional and independent music artists and labels.”

“We have a service in Damroo Plus, which is designed to support independent artists. There are times when independent singers/musicians don’t have proper platforms or labels to support them, this service will help them to showcase their talent and give opportunities to upload their songs and music on this App. Through this platform, they can also upload their songs on other platforms like Saavn, Gaana and Spotify. In this App, they can also keep a track of their songs/music, like how many people have listened to their song, in which country/cities is it getting popular, how much revenue they are making through these songs and as soon as they claim this revenue from us, we pay them immediately. And, like other music apps or platforms, here also they can make their playlist and create their fan base”, he added. 

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Report card: 30 years of reforms in CPSUs

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The country was in a deep fiscal crisis and facing a very difficult balance of payment (BoP) situation during the late 1980s and early 1990s. The acute fall in the BoP led to an expeditious depletion of forex reserves. It declined to Rs 3142 crore and this sum was not even enough to finance imports for one month.

At that time, there was a minority government at the centre with the support of Congress from outside. To counter the problem and for fiscal correction, the government decided to divest up to 20% of its equity on selected central public sector undertakings (CPSUs) as one of the measures through the interim budget, presented in March 1991.

Later, the Congress party formed the government and introduced a new economic reforms policy in July 1991. The new era of reforms started and it led to the adoption of the disinvestment policy of the previous government. Since 1991, all successive governments have been adopting more or less the same policy for the disinvestment of CPSUs.

In 1998, the BJP-led NDA formed the government and took the initiative of speeding up the process of disinvestment. During the NDA government, the maximum amount was realised through disinvestment in the form of strategic sales. In such a case, the ownership of the CPSUs was given up by the government.

From 2004 to 2009, the pace of disinvestment had slowed down. At that time, the Congress-led United Progressive Alliance was in power with the support of the left front. The left parties were not in favour of the disinvestment policy. The left parties forced the government to retain the existing Navratna companies and profit-making CPSUs will not be sold. Accordingly, the strategic sale methodology was called off.

However, during 2009-14, the process of disinvestment had picked up pace as the Congress-led UPA-II formed a full majority government. The government ruled to bring its equity in CPSUs down to 51% without diluting its public sector character.

Henceforth, the BJP-led NDA came back in power under the leadership of Narendra Modi and formed the government in 2014. It seemed that the government would not go ahead with the disinvestment policy as the BJP had not even put disinvestment on its manifesto. It was expected that Narendra Modi may choose to revive CPSUs instead of selling them off. But by ignoring all earlier assumptions the Prime Minister Modi had started giving a new impetus to the process of disinvestment. The government raised Rs 322383 crore from the disinvestment of CPSUs in its five-year tenure. This was done in an average of 21 transactions each year.

In the general election of 2019, the NDA again formed the government. However, this time the government faced tough challenges. The government faced the brunt of the Covid-19 pandemic in the financial year 2021. The global pandemic had increased the government’s expenses too much and reduced income drastically. The government tried to speed up the divestment to increase its revenue but failed. The global Covid-19 pandemic had also hindered the process of disinvestment. The government had realised only 15.64 per cent of the amount against the target in the financial year 2020-21.

Therefore, the government adopted a new robust privatisation policy as ‘The Strategic Disinvestment Policy-2021’ (SDP21) for the CPSUs to reduce the fiscal burden. This time the government replaced the word ‘disinvestment’ with ‘privatisation’. All CPSUs have been divided into strategic and non-strategic sectors. The CPSUs of the non-strategic sector will be completely privatised. The government has kept four sectors under the strategic sector and planned to limit its presence in this too as a bare minimum presence.

In addition to disinvestment, the government came up with a monetisation programme under the policy of CPSUs reform. The government has introduced a roadmap for asset monetisation in the budget for 2021. The government has proposed to launch a ‘National Monetisation Pipeline’ to assess the potential value of underutilised and unused government assets.

It is expected that the government’s privatisation programme for FY22 may get delayed due to the second wave of the pandemic. But the government is confident that the target of Rs 1.75 trillion is still achievable. Nevertheless, the government should introduce a transparent policy for CPSUs reform and not limit itself to privatisation alone. The amount raised through disinvestment should be used either to retire old debt and/or to restructure CPSUs. It should not be used for expenditure. 

Vinay K Srivastava teaches at I.T.S Ghaziabad. His Twitter handle is @meetdrvinay

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