Geography Reference
In-Depth Information
retreated from the competition on 1 September 2001. In its press release
announcing the withdrawal of its bid, Singapore Airlines said that it 'was
surprised by the intensity of opposition to the privatization of Air India from
various quarters including certain sections of political groups, trade unions and
of the media'.
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In contrast to the divisive experiences with BALCO and Air India, the
government was able to successfully negotiate the sale of a 51 per cent stake in
Computer Maintenance Corporation (CMC) to Tata Sons in October 2001. CMC
is located in a growing industry, and unlike the BALCO employees, the workers
in CMC favored the sale.
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The contrast between the unproblematic sale of CMC
and the case of BALCO illustrates the extent to which labor opposition and
political and public criticism delayed privatization in the latter case. This will be
particularly problematic for the privatization of India's old-economy industrial
plants that are often characterized by excess labor, low productivity, and debt.
CONCLUSION
India firmly joined the ranks of liberalizing countries during the 1990s. Changes
to the trade, investment, and financial regimes have had a tremendous impact on
economic functions in the state, and on the interactions of the state and the
economy. Nevertheless, several items on the reform agenda were not addressed
during the first decade of reform.
Foremost among these is privatization. While reforming and retrenching the
public sector, were often brought up during the 1990s, popular and political
opposition successfully forestalled implementation of the plans. The
disinvestment of BALCO suggests that while popular opposition to privatization
continues, there are definite limits to the extent of political opposition. Political
leaders, whether members of the national ruling coalition or members of the
opposition, have a similar need to attract foreign investment to their home state.
In the analysis of BALCO's privatization, I have suggested that while
electoral pressures first compelled Jogi to support the workers in their strike
efforts, his need to present his state as an attractive site for investment in the end
forced him to quietly withdraw his support of the strike. Lower levels of public
investment and a reduced regulatory role for the government have forced states
to seek out investment to finance economic growth. In this context the Chief
Minister of Chhatisgarh Ajit Jogi's initial vocal opposition to BALCO's sale and
his subsequent tacit approval are not surprising. Rather, his actions reveal his
dual needs to play the role of opposition politician at the center and the role of
incumbent within his own state, a role in which politicians from across the
ideological spectrum will increasingly find themselves.
