The Ideological Abyss

To rescue or not to rescue Vodafone goes beyond one's views on privatisation or nationalisation — it depends on what will work in a given context

- R JAGANNATHAN

This column is called "Beyond Ideology" for a reason. When polities, economies and societies have become more and more complex and diverse in nature, using ideological lenses to make policy has limited utility. Today, no country can be called capitalist or communist as these terms were originally defined. They are all hybrids. When technology companies wield so much power and know so much about us, should we just call them private companies providing a service or private-public entities with state-like characteristics? Normally, it is the job of the state to regulate economic and social activities; but we expect social media to do some of the regulatory jobs that states usually do.

In this article, one does not propose to examine all these issues, but to focus specifically on one question: When is it okay to privatise an entity, and when does the opposite serve public interest better? We shall do it using two examples: Vodafone and Air India. Both were (and probably still are) basket cases, needing sector- and case-specific solutions that go beyond ideology. We have to focus on what works.

The Narendra Modi government appears to have tied itself in knots over Vodafone Idea. The company is sinking, but the government is unsure how to handle its request for a bailout. Telecom Minister Jyotiraditya Scindia said in an interview with CNBC TV-18 that he cannot offer the company's massive dues for conversion into equity. Since the government already holds a 49 per cent stake, converting more dues would make Vodafone a public sector unit.