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`Sick Kerala PSUs must be brought under jt. sector'

Our Bureau

THIRUVANANTHAPURAM, March 7

THE public sector undertakings in Kerala, accounting for investments up to Rs. 9,000 crores with more than half mired in losses since inception, should be forthwith brought under the joint sector as a first step towards comprehensively restructuring them and modern industry practices such as employee stock options should be considered to attract and retain good managerial talent to equip them face competition in the highly polarised corporate world.

This was stated here by Mr. K.P.P. Nambiar, leading Kerala-based industrialist and promoter of the Kannur Power Project, during the course of his presentation at a one-day seminar here titled, `Towards a more investor-friendly Kerala', organised by the T hiruvananthapuram Press Club in association with the Department of Industries, Kerala.

He said Kerala should ideally opt for a Government which is either `right' or `left' of the Centre, an extension of the erstwhile Government led by Mr. C. Achutha Menon whose visionary leadership of the 1970s is credited with having initiated some of the pioneering developmental initiatives with few parallels in the State's entire history.

This approach will ensure that the two opposing political streams share power among themselves so as to bring the best out of coalition politics to the common good of the State.

While admitting that the IT sector held vast potential for the State, Mr. Nambiar sounded a note of caution against the perceived neglect of the hardware and manufacturing sector. ``In fact the hardware sector is the best suited for Kerala with its huge population of the educated unemployed. The software sector, on the other hand, is reserved for those with specialisation and its job potential is limited to that extent,'' he said.

Despite its ideological pretensions, China has been able to effect enabling policy decisions to make big strides in terms of investments in the hardware sector generating, in the process, lakhs of employment opportunities. The Kerala State Electronics De velopment Corporation (Keltron), of which he was the founder-chairman, was expected to play an active role in the hardware sweepstakes.

Disinvestment in the PSUs and induction of private sector participation should be followed up by a major dose of financial and organisational restructuring. Competent financial and technological partners should be identified for the purpose.

In this connection, Mr. Nambiar recalled an instance in which a British company offered financial and technological co-operation to the State Government for producing titanium metal from the mineral-rich sands of Chavara, considered world's largest depos its.

The Government rejected the offer saying it did not want a foreign company to do business in the State. It still continues to export semi-processed raw material to foreign countries for a pittance. Any attempt at value-addition would have raised the Stat e's bargaining power, boosted employment levels and returns, too.

He wanted the Government to initiate policy measures to create investor interest in the State. Kerala accounted for one of the lowest level of FII investments among leading States while West Bengal, which boasts similar ideological predilections, has bee n able to corner the third largest quantum of foreign investments to itself.

The comparisons with China can be more illuminating _ during a period of four years from 1993 to 1997, the Chinese Government introduced radical changes in policy matters which saw it being flooded with FII investments of $190 billions. Investments in in frastructure during 1997 alone accounted for $350 billions.

Similarly, the power, road and other infrastructure sectors required improvement in the State which called for massive investments. If the comparative levels of consumption of power among domestic, high-tension (HT) and extra high-tension (EHT) consumers could taken as indicators to the relative level of industrialisation of a State, Kerala, with its grossly lopsided scores _ 48.5 per cent by domestic consumers and less than one per cent by HT/EHT consumers _ will have to go a long way before calling it self an industrialised State, he said.