All round privatisation of economic actitivities would only enrich the politically connected few and the public interests would be increasingly sacrificed for private profits, observed a senior UN official.
Delivering the opening address at a two-day international conference on " Resurgence of State owned Enterprises" (SoEs), Assistant Secretary General for Economic Development,United Nations, Prof Jomo Kwame Sundaram, said over privatisation would worsen overall public sector performance.
He, however, said there was an urgent need to address the problems of SoEs so as to make their functioning efficient and ensure that they deliver the social and economic good.
Unclear and contradictory objectives and ambigious performance criteria often led to the inefficiency of SoEs.
"A number of reasons like unclear and contradictory objectives, co-ordination problems among government agencies, inter-depeartmental rivalries, ineffective monitoring and lack of managerial skill are contributing to the inefficiency of SoEs," Sundaram said.
The meet, in which eonomists, planners and civil servants and trade unionists are presenting papers and deliberations, was organsised by the Kerala's Industries Department.
Stating that privatisation was not a better answer for solving the problems of SoEs, Sundaram said "Privatisation is neither a miracle cure nor a universal panacea."
Increased costs of living, poorer services, reduced jobs and overtime work would be some of the adverse consequences of over privatisation, he said.
State Minister for Industries and Commerce Elamaram Kareem, who presided over the opening session, said state-owned enterprises had been the main driving force of the economies of the newly-liberated contries after the Second World War.
"The trend of developing SOE continued till 1970s as an alternative to the private capital. But, the neo-liberal experiments that could bring in temporary booms in some countries started challenging the role of governments in the productive sectors and demanded the withdrawl of state machinery from economic activities," the Minister said.
He said Kerala had the largest number of SoEs in the country due to various historical reasons. When the present LDF government came to power in 2006, 30 of the 42 PSUs were making losses to the tune of Rs 70 crores.
However, in 2009-10,this trend had been changed and many of the PSUs had been put on a recovery track , registering an overall profit of Rs 240 crore. The number of loss making companies had come down to five, he said.
Cuban Ambassador to India,Miguel Angel Ramirez, state Planning Board Vice Chairman Prof. Prabhat Patnaik, State Additional Chief Secretary (Department of Industries and Commerce T. Balakrishnan and Chairman of the Public Sector Restructuring and Internal Audit Boad (RIAB), John Mathai also spoke on various aspects of the topic.
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