3 years of Modi government: Country for Sale

The Modi led BJP government has fast tracked the process of privatisation. It is determined to dismantle the entire public sector in the country, conceived to achieve ‘commanding heights’ of our economy. Public sector today is the repository of huge national assets including land and minerals, vital infrastructure and huge productive forces. It is the wealth of the nation. The decision of the BJP led government to allow 100% Foreign Direct Investment (FDI) in such strategic sectors of our economy like defence, railways, telecom, civil aviation, satellites, power, petroleum, mining, coal etc is nothing but anti national in character. This will not only adversely impact the functioning of the PSUs in the concerned sector but also compromise our national interests including national security. Can anything be more ‘anti national’ than handing over our precious national resources and wealth to the corporates, national or foreign?

• Dismantling the public sector became a part of the government agenda since 1991 with the official advent of neoliberal policies under the Congress government. The concepts of self reliant economy, economic sovereignty, balanced regional development, social justice etc were sought to be given a go by. The Modi government has intensified these policies.

• Soon after coming to power in 2014, the Modi led BJP government wound up the Planning Commission and replaced it with the National Institution for Transforming India (NITI) Ayog. NITI Ayog was entrusted with the task of identifying central public sector undertakings (CPSUs) that are to be disinvested and sold off. It has already identified 74 (CPSUs) – including 26 for downright closure and 10 for strategic disinvestment. (Disinvestment means the government would retain management, strategic sale means that majority shares will be sold and management would be handed over to the private party). The government has given ‘in principle’ approval to the recommendations of NITI Ayog. 

• The government has appointed Reliance Mutual Fund Managers to provide consultancy and execute its project of quick selling 10 CPSUs strategic to our national economy, including ONGC, GAIL, Oil India Limited, Indian Oil Corporation, Coal India Limited, BHEL, Bharat Electronics Limited etc through the Exchange Traded Fund (ETF).   This is like asking the robber to guard the house! Reliance’s mother company is itself interested in sale of PSUs at throwaway prices!

• Bharat Earth Movers Limited (BEML), one of the nine defence public sector units engaged in defence production, Salem, Durgapur and Bhadravati plants of Steel Authority of India Limited (SAIL), Bridge and Roof Company, a premier mini ratna PSU, Dredging Corporation of India, Hindustan Flurocarbons etc are among those identified for strategic sale. The Defence Ministry has also ordered to immediately list other Defence PSUs viz., BDL and MIDHANI in the stock market to facilitate disinvestment of at least 25% shares.

• 25% shares in all the five public sector general insurance companies will be sold to private companies, both Indian and foreign.

• Public sector makes huge contribution to the national exchequer. It not only scrupulously pays its taxes but also dividends, special dividends etc in addition to keeping the national economy afloat with regular capital investments of not less than Rs 1.5 lakh crore every year. In 2014-15 the PSUs contributed more than Rs 2 lakh crore to the public exchequer.

• In contrast there are innumerable instances of tax evasion, manipulation of accounts etc by the private sector establishments, including the big corporates, both national and multinational. Government figures themselves inform that every year, the national exchequer is robbed of not less than Rs 5 lakh crore through such manipulations. In 2015-16 alone, direct tax evasion amounted to Rs 6.59 lakh crore.

• The BJP government is taking calculated measures to weaken the well functioning public sector units and make them sick to pave the way for privatisation. The surpluses generated by the public sector units, meant for modernisation and continuous updating are being drained. Many PSUs are forced to pay dividends to the government much above the statutory level, sometimes as high as 50% or more. This is a well articulated design to make them sick and create ground for handing them over at cheap rates to their favoured domestic and foreign buyers.

• The government has decided to close Indian Drugs and Pharmaceuticals Limited (IDPL) and Rajasthan Drugs and Pharmaceuticals Limited (RDPL). It has decided to privatise Hindustan Antibiotics Limited (HAL) and Bengal Chemical and Pharmaceuticals Limited (BCPL) if buyers are available; otherwise to close them. Even today, these can be made profitable by infusing the necessary capital and utilising their huge assets for this purpose. But the government is not willing to do that, making a mockery of its own slogan of ‘Make in India’.

• Public sector in our country was an instrument to attain self reliant economy, create the industrial base of the country. It played an important role in developing balanced regional growth. It was the public sector which built the major infrastructure of the country like power, transport including railways, roads, ports etc when the private sector did not have the capacity or was not ready to take the risk of investing huge amounts of capital in these sectors, which do not provide immediate profits. Thermal, hydro and nuclear power projects, transport and communication, production of steel, defence equipment, ship building, oil, coal etc were set up in the public sector. The Research and Development taken up by the PSUs had a huge contribution in our technological and industrial advance.

• The public sector research institutes immensely helped the farmers by providing new techniques to improve agricultural productivity in our country.

• The LIC has been contributing for infrastructure development, drinking water projects etc. The role of our public sector financial institutions in protecting our economy during the 2008 global financial meltdown is now well acknowledged. In fact, the private general and life insurance companies and the banks were nationalised to protect the interests as well as savings of the people from the loot of private companies and utilise them for the benefit of the people including the poor in the remote rural areas.

• The public sector had basic contribution in establishing the right to organise and collective bargaining of the workers which is sought to be denied in the private sector. The struggles of the public sector workers to attain better working and living conditions inspired the workers in other sectors in their struggle for trade union rights and other benefits.

• The townships constructed in the areas where the PSUs were located, many in remote undeveloped rural areas, not only provided housing and other facilities for the workers like schools, hospitals, dispensaries, community centres, shopping complexes etc but also led to overall development of the entire area. Thousands of the people in the surrounding villages benefited indirectly by getting employment and income opportunities through providing different services to the people in these townships.

• By implementing the reservations for SC/ ST sections, PSUs provided employment and opportunities for their development thus contributing to social justice.

• Dismantling public sector means subjugating our national economic interests, our economic independence and sovereignty to the interests of international finance capital, to imperialist interests. It means handing over our national assets, our national wealth to the corporates in a silver platter. And it means facilitating ferocious exploitation of our workers by the profit hungry employers; imposing slavery on them. It means robbing the SC/ST of their statutory right to reservation. This will ultimately lead to the crushing of democratic structures and social institutions as a whole.

• The entire country must oppose such privatisation and disinvestment and strategic sale of public sector enterprises. It should not be left to the public sector workers alone.

Disclaimer: The views expressed here are the author's personal views, and do not necessarily represent the views of Newsclick