Vedanta Chairman Anil Agarwal on Monday at India Economic Conclave said the government should reduce its stake in public sector companies and banks to 50 per cent.
“It is not that the government company can’t function very well but it is important that they make them free,” he said.
Currently there are 14-15 banks and around 40-45 companies in the country where the government has a significant stake.
“Today government holds on an average 87 per cent stake in these companies including banks. If they bring down their holding to 50 per cent they will get $1 trillion,” he added.
“Government has no business to be in the business,” Mr. Agarwal who comes from Bihar, said in Mumbai.
“India has best hydrocarbon under its ground,” he added. Today $500 billion is being spent to import these natural resources. The government is sitting with the largest and best reserves of oil and gas and coal along with gold and diamond, he said.
He drew an analogy and said, “if Kohinoor (the precious diamond) was produced in India, why is it that the country is importing 100 per cent gold and diamond?”
“So companies that are into oil and gas or those like Coal India can be given to someone else,” he asserted. “If we can free all our natural resources companies and even the banks, India will have a positive repercussion of this ” Mr Agarwal said.
Emphasising the need for reduction of bureaucratic interference in the functioning of the businesses, he said, bureaucracy, which still has an interference, should be reduced to make policy and not execute them. They should only make strategy, Mr Agarwal said. “Government should not be revenue minded but let wealth be created,” he added.
He also praised, Sterlite Telecommunication,which is shutdown permanently by the Tamil Nadu government citing environmental issues. “We have very phenomenal business, Sterlite Telecommunication, which I am very proud of.”
We are not even exploiting 4.5 environment of what the US is doing, he said. “We are not even polluting as much as they are,” he added.
All is not well for the company. Lawyers and activists said Mr Agarwal’s Vedanta did not discover India’s natural resources. The public companies could work far better than the private ones, if the government intended so.
Jim Raj Milton, lawyer in Madras High Court said Sterlite was perpetual violator of norms set by Pollution Control Board. It would not submit periodical report to the government for years.
In 2013, the Supreme Court of India fined Vedanta ₹100 crore.
Agarwal further added that whenever the government has entrusted the private sector with any responsibility, they have delivered the best. Contrasting his views, Mr Milton said, government companies could perform exceptionally well, if laws are properly implemented.
The offshoot of Vedanta, Sterlite has been a history-sheeter. This company kept violating all rules and want people to believe that if private companies break laws, they shall be punished. That is no proper defence against exploitation.
“If he actually meant what Mr Agarwal said about government picking up major violators and punishing them, then Vedanta is one amongst the many such perpetual offenders,” added Mr Milton.