Vedanta Resources Plc Chairman Anil Agarwal on Monday said if the government reduces its stake in public sector companies and banks to 50 percent, they will work more efficiently.
Currently there are 14-15 banks and around 40-45 companies in the country where government has a significant stake.
"Government has no business to be in the business," Agarwal said at India Economic Conclave 2019 organised by the Times Group.
He said his company acquired four government companies and all of them are three times more productive. "Today government holds on an average 87 percent stake in these companies including banks. If they bring down their holding to 50 percent they will get $1 trillion and become much bigger," Agarwal added.
If the government gives up 5-10 percent stake in each of the companies to the private sector, it will do much better. "When we talk to the government (regarding stake sale), they say we will sell the asset. But what I feel is government should not be revenue minded and should go in a very simple manner and let wealth be created," he said.
According to the Vedanta chairman, the government is sitting with the largest and best reserves of oil and gas and coal, along with gold and diamond, and the country is spending around $500 billion for import of resources, which will go up to $1 trillion.
"It is not that the government company can't function very well but it is important that they make them free. So companies that are into oil and gas or those like Coal India can be given to someone else.
"Even government law says if the government control or holding is reduced to 50 percent then CAG and all other extra audit goes away and the chief executive officer can work independently.
“Even markets will appreciate such a move. If we can free all our natural resources companies and even the banks, India will have a positive repercussion of this,” he said.
He emphasised on the need for reduction of bureaucratic interference in functioning of the businesses. "Bureaucracy still has an interference and that should be reduced. Their job is make policy and not execution. They should only make strategy," Agarwal said. The government's role is to govern and have a regulator, he added.
On the issue of environmental concerns, he said, "We are not even 4.5 percent of what the U.S. is. We are not even polluting as much as they are. I believe self certification is important. We don't want to go to the government but we should self certify ourselves and if the industry violates any norm then we can be penalised for that," he said.
Agarwal further added that whenever the government has entrusted the private sector with any responsibility, they have delivered the best—be it in case of airports, telecom or even power.
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