Sikander Bakht, Minister of Industry, is not known to talk much publicly, but holds very strong views--privately. For the past few weeks, some of this, mostly related to the functioning of public sector enterprises, have been expressed more and more strongly and with increasing frequency. Most of it has been at seminars and public functions. Bakht lifts off here on privatisation, reducing government control and industrial policy-making in a government that is riven with political uncertainty. This is the full text of the interview:

For months you refused to make any public statement saying you don’t know enough about the working of your ministry. For the past few weeks, you have talked a lot, making very definite policy statements, especially about Public Sector Undertakings (PSUs). Do you now know what you are doing?
These (PSUs) earlier had a definite purpose. But now out of 236 PSUs, 104 are sick. Not only are they loss-making units, some of them are not working at all. But the workers have to be paid and we are trying to find money from somewhere to help them.

What is the solution?
The non-functioning PSUs are a dead-weight on the economy of the country. And the government has got to reduce their areas of functioning because governance is most important. If we start meddling with everything concerned with the life of the Indian citizen then the area of the functioning of government increases. We have to see how to decrease this area and be efficient. One method of doing that is disinvestment. We are also trying to see that no worker is just dumped on the road. So it’s a very difficult battle that we are facing.

Are you saying that privatisation hasn’t worked so far because workers have not been given a good enough deal for VRS (Voluntary Retirement Scheme), or are there other reasons?
A Disinvestment Commission already exists. Of course, the instrument today is not as efficient as it should be--there are too many layers. The Commission makes recommendations, then the core group of secretaries listen to them, followed by the core group of ministers and then the matter goes to the Cabinet. There are just too many layers. This hassle has got to be reduced.We are also going in for joint ventures for PSUs which have started working again. You see, we have succeeded in setting the right direction, but we can’t say that we have succeeded in achieving everything that we set out to do.

You talked about effective disinvestment. But the Commission is powerless to do anything beyond recommending things. Are you going to empower it to supervise privatisation?
Your question is well taken. When the Commission was created it had also the responsibility of supervision. Somewhere along the line it lost that power which is not right. This has to change. The Commission has an establishment to back it, and there has to be an active role of the commission otherwise the process will not work. We are looking into it.

The BJP-led government’s statements to push through with administrative reforms, cut red-tape, haven’t really worked. The Commission for all purposes is run by the group of secretaries. How do you propose to break though this stranglehold?
We have inherited the old system, a basket of mess. We are trying to unscramble it. We haven’t achieved much, but we have definitely set a direction and are moving in that direction and hope for better results.

If the government trusts people enough to appoint them CEOs of public sector undertakings, then why appoint middle-level bureaucrats as directors to the boards who often have no idea about business, the company they are appointed to, and contribute nothing beyond a link with the ministry. Are they necessary?
Please keep in mind that there are various reasons for the failure of the public sector-- government mismanagement, union rivalry, clear lack of functions, over-staffing and somewhere it is the fault of the managers themselves. So if managers say, if they give us the right to manage, everything will be all right I don’t agree with them at all. There are management faults, too.

You have taken some tough decisions as far as Maruti Udyog is concerned where government has agreed to share power and management with a private entity (Suzuki Motor Company, which now has the right to appoint a managing director in the 50:50 venture). Why don't you replicate it elsewhere, why can’t you?
Maruti was entirely a different experience. It is no more a public undertaking. But even with Maruti it unfortunately got to a stage where instead of thinking about whether they want Maruti to succeed or go down, people involved themselves with the question of the tenure of a couple of officials. This was not right. There was even a debate in the Lok Sabha on this issue and there was criticism, but most of the questions concentrated on this (government nominee and current managing director) Bhaskurudu.Nobody spoke about Maruti Udyog Ltd, about what they wanted to do with it. In the auto industry, competition is getting sharp, new models are coming up. My friend (Bakht’s predecessor) Murasoli Maran wasted one-and-a-half year by converting it into a question of national pride. Unfortunately he placed the interests of the entire country in the same scale as Maruti. So, new companies are launching new technology vehicles in October-November and we are going to be one and a half years behind. This is going to cost us a lot.

How is this government going to cope with a lot of lost time? These days, India doesn’t look too attractive.
I will surprise you. As far as foreign investment is concerned, April was poor, it started looking up in May and June.

There was a flurry of approvals after the nuclear tests, possibly to soften the blow of sanctions. But what about inflows?
Naturally inflows are slower than approvals, but inflows have been progressively higher as well. We have succeeded in getting over the hump of sanctions, and you will see that foreign investment will come into the country in a big way. Maruti, by the way, was a very good signal to foreign investors that India means business.

Instead of endless committees and rounds of meetings with secretaries, why not have a super group of the economic ministries, where ministers of finance, industry, commerce and power meet, take quick policy decisions and push to implement them?
I agree with you. These committees over committees unnecessarily create obstructions in the efficiency of government. Something needs to be done. But these ministries have their own axe to grind even as they have common features. We should be able to settle down with these common features instead of going into one group after another.

Prime Minister Atal Bihari Vajpayee and the Finance Minister Yashwant Sinha have made very strong statements about pushing through with policy, clearing projects right down to the district level within 90 days and then holding people accountable if schedules aren’t met. The reality doesn’t reflect the words.
I don’t like boasting but I am satisfied with the way things are moving in my ministry. Quite a few things have been done in a short time, Maruti, for example. For all these years, there was total block about whether we are going to participate in the Paris Convention or not. In five months (of being in office), we decided that we will. Then comes intellectual property rights and patenting. We have 4-5 patent offices--you only have to visit them to see what a mess they are in. Now we plan to have a fully modernised office in Delhi. The place has already been identified and almost acquired the land. We need this because in the present set-up, you don't get patents for 6-7 years. We have also set up a high-powered committee of scientists under the chairmanship of Raja Ramanna. Abdul Kalam and other prominent scientists are members of this committee and they are advising us on how to go about ensuring the protection of our products. We are also going in for a technology park in Delhi, a software city. So things are moving.

It was part of the manifesto but the government-industry interface for a core-team doesn’t seem to have taken off.
It has. The ministry’s interaction with industry, especially major organisations like CII (Confederation of Indian Industry) and FICCI (Federation of Indian Chambers of Commerce and Industry) have been very close and intense. We have formed a group of industrialists--four from CII and four from FICCI--to help me get rid off the sick PSUs and to provide joint venture opportunities for the sick PSUs.

Aren’t you running out of time? Industrial growth doesn’t look good...
Industrial growth is looking up. We are expecting that by the end of this year we will close at about 7 per cent. Things are looking up, but we are rising from a morass.

Are you saying that there is so much gloom in the industrial and business climate that nothing looks good?
The atmosphere has become like that and I can’t understand it. I believe the finance minister was given a very difficult job. No finance minister in the world could have done something so quickly; this one had to present a budget almost immediately after taking office. It was good, there were also a few faux pas. We’re still carrying around the burden of those faux pas and no one is willing to believe that. For instance, the problem with petroleum prices was the fault of a bureaucrat. (for a day after the Budget on June 1, there was confusion about who would pay for a hike in administered prices of petrol). You have to see under what conditions the budget was presented. Could anyone have expected a better budget under the circumstances? It is our bad luck that we had to deal with such a sense of gloom. Yes, we haven’t been able to wipe out the gloom.

Whom would you hold responsible for that? Bureaucrats, politicians or businessmen?
Let us not categorise them. Again, the BJP did not come to power with absolute majority. We have got to lead a coalition of our alliance partners. We have had a lot of hassles and unfortunately these have overtaken anything and everything that we are doing. Automatic approval for power projects up to Rs 1,500 crore is a very big thing. If the gloom wasn’t so terrible, this should have been a subject in the media for a long time; we have not been able to handle the media angle.

Do all of your alliance partners agree on progressive investment policies, restructuring of PSUs and other such critical things?
Except political leanings, our alliance partners are totally committed to the National Agenda for Governance. There’s just this gloom over the country because of the fragmentation of national politics. Whatever is happening, is political.