Leak Proof

That the government leaks like a sieve is well known. But when it hurts, one would expect the chief to crack the whip, in the manner of companies. But that was not to be, when the petroleum ministry's internal note on paring Reliance Industries' gas price found mention in a daily. Rather than the chief (Petroleum Minister Murli Deora) howling, it was his departmental secretary who was disturbed-he ticked off senior officers. Test of a "hands-off" minister?

New twist to Dabhol

In bureaucracy, the decision-making process is akin to the path traversed by a horse-driven chariot for more reasons than one. The biggest one: decisions are delayed. The more relevant one is that the turning radius for a decision is very large-it takes a lot to make a U-turn once a particular course of action is decided upon informally. The latest incident: the government is planning to now sell the Ratnagiri power project (erstwhile Dabhol project) as a single entity and not in parts-power plant and LNG terminal. The trigger: Cabinet Secretary Chandrasekhar, unlike his predecessor, is not inclined to sell it in parts.

While the government has turned away capital and the domestic companies are paying more attention to other sectors, is the regulator doing enough to promote investments? At first glance, an overwhelming 'No'. For, the stiff solvency norms only deter business development. But, take a closer look at the business and you see why: if the company sells you a life insurance policy, surely, the conservative lot would not like it to be under any financial strain.

However, for the brave-hearted, regulation allows for sale of equity-linked life insurance policies. Here, the insurance company becomes a fund manager, and your policy fortunes are linked to the market. In such cases, the solvency norms are vastly whittled down. But again, life insurance policies are not bought. They are sold. Not surprisingly, the private sector has made considerable inroads over the last six years, having wrested 25 per cent market in the life business. Given that this trend will only strengthen, the government ought to privatise a few of the five insurers in its fold. Especially, since the public sector insurers have not had capital infusion since their birth a few decades ago.