Why ULIP mis-selling has become rampant ?

The Centre’s asset monetisation plan is extremely ambitious since it comes over and above the disinvestment and privatisation targets which are themselves hobbled by tardiness and pandemic-induced compulsions. It has brought into its ambit virtually every sector of state-owned infrastructure — 15 railways stadiums, 25 airports, 160 coal mines, roads, power and gas transmission systems. If the asset monetisation plan has to work, the government must take care of a few things. It goes without saying that transparent bids should be the only way of picking the investors who would be handed over the right to use these assets. Entrenched big business groups would try to corner most of the assets put up for utilisation. For smooth execution of the plan, a few points have to be emphasised.

First, like all programmes in the public space, the entire process has to be transparent, not only for the inherent sake of fair play but also for minimising opposition and ensuring smooth passage. Second, the assets should not fall in a few hands only. Third, since the ownership of the assets would be with the state, the government has to ensure that the private players must not undermine maintenance of the assets and try to milk them dry to make as much money in as short a time as possible before handing the asset back to the administration. If the entire process can be conducted transparently it would also earn the great collateral benefit of increasing the trust of foreign investors, whom the government is intent on wooing for the broader economy and employment generation. Since the plan is being sold as a mega scheme — the headline number is ensuring publicity — and global investors might start using it a barometer of transparency in the Indian system.

Only if these two conditions are met, will the plan meet its twin objective of revenue generation and promote efficient use of the assets. Economists and policymakers are unanimous in the opinion that the primary focus of such exercise should be to improve efficient use of the assets that are offered for long-term use by private players. It is often said that Caeser’s wife should be above suspicion. But in an active democracy, it is perhaps more important for Caeser’s programmes, rather than his wife, to be above suspicion.