4 Disinvestment in India
to its technology partner Fujitsu. We used the Marutis sale by the
Government of India as the precedent, where sale was made in
favour of the technology partner and determined the negotiated
price similarly. What prompted us to sell a pro t-making company
was the realization that the government having opened up the sec-
tor to private and international players for investment in 1991, it
would be di cult for the public sector company to compete with
private players and continue to make pro ts. e earlier public
sector and monopoly supply company made huge pro ts with our
annual lobbying in the  nance ministry for a high di erential in
duty on  nished products and the imported raw materials that we
bought, and everyone was prepared to allow this high di erential,
the gainer being a public sector company.  e second annual pil-
grimage that we made was to the telecom ministry and they were
very happy approving our heavily padded costs, a er all that was
also in favour of an Indian public sector company. Consequently,
we made huge pro ts and the consumers ultimately paid for all
these largesse, but they were so dispersed then, and are even now,
to be visible and e ective. e 1991 reforms changed all this with
low duty rates, multiple players and consequent cut-throat compe-
tition leading to drastic reduction in prices.  e competition was
so severe that even Fujitsu had a tough time running this unit.
I cannot but recall the arguments that we routinely made in the
Government of India to protect the holy cow, the Indian indigenous
industry, against the onslaughts made by the villain multination-
als.  ere were huge duty protections in favour of the Indian steel
plants making our raw material steel very expensive for exporters
of steel products, leading to their demand for refund of duty on
the raw material.  e subsidy led to a quota of scandals every year
by exporters being paid subsidy on misclassi cations and forged
documents.  en there were subsidies on deemed exports (Indian
projects  nanced by World Bank loans where international sup-
pliers could also bid; hence the justi cation for subsidy), and these
led to more controversies.