“FICCI applauds the initiatives being taken by the Government to implement the dynamic radical agenda unveiled in this year’s budget relating to disinvestment, privatisation and monetisation of assets,”, said Uday Shankar, President, FICCI. The industry is greatly encouraged by the Government’s resolve to accord high priority to the implementation of these announcements, as was also highlighted by the Prime Minister, Narendra Modi during a Webinar organised by DIPAM yesterday.
“FICCI is excited about the opportunities that would open up, bolstering investments in infrastructure, generating employment and growth, especially after a year-long period of negative growth,” he added.
FICCI President shared the industry’s perspective on an effective implementation roadmap for privatisation and asset monetisation at the webinar. He emphasized that the quality of the asset is as important as the credibility of the process. In addition to being fair and transparent, the process should have smooth sailing and adhere to projected timelines. Regulatory and legal hurdles should not derail the process. He also stressed that asset valuation is contextual and price discovery through an objective and transparent manner should be acceptable.
He further added that senior government functionaries and other officials responsible for the execution of the program would adopt a highly cautious approach in case they are not insulated from the outcome of their bona fide decisions. Wisdom gained in hindsight should not be used to question the judgment of the decision-takers and such officers should be offered protection for their action done in good faith.
FICCI President also highlighted the importance of the design of the auction. He said it should not be a non-starter nor should it lead to extensive competition which may impair implementation. While revenue maximization is the desired objective, larger good in terms of making the resource available to the public should over-ride everything else. In the case of the reverse auction, a bidding war can lead to the winner’s curse, making the whole deal unviable. There should be some degree of rationality in the design of the auction.
He further added that advisers should be appointed through careful consideration and should have an international presence and network. Appointing the lowest bidder does not always ensure effective discharge of responsibility. Undoubtedly, there are questions on the capability of the lowest bidder. There is a need to qualitatively qualify the advisers.