Who benefits by privatization!

 

 

Who benefits by privatization!

The process of accelerating privatization strikes at the root of mixed economy where the public sector occupied commanding heights in the growth and development of India, striking a healthy balance between the public sector and private sector. The privatization will dismantle the Welfare State, undermining the principles of social and economic justice enshrined in the Directive Principles of State Policy (Part IV) of the Indian constitution.

Today, the Union Government is trying to privatize practically in every sector which doesn’t serve the larger national interest, least of all the interest of Aam Aadmi. No one is against the private sector; nor anyone denying the role and importance of private sector in the Indian economy. But what concerns the people is the manner in which the crony capitalism is promoted, resulting in concentration of economic power and national wealth in the hands of few Corporate Houses- developing into an economic oligarchy- to the detriment of the nation leading to monopolization, eliminating the small and the medium entrepreneurs in the process. The rich is growing richer, while the poor is getting poorer at an alarming pace.  

The generation of wealth is not resulting in equitable distribution. India is the most centralized large economy in the world. According to the World Inequality Database, the top 1 per cent of the richest Indians controlled 21.4% of the country’s income in 2019-more than  Russia (21.3%), America (17.7%) and China(13.9%),  with India emerging as the poster boy of economic centralization  in a country where the two-third population(68.8% ) live with less than $2 a day.  More than 40% of the FDI inflow was captured by the Ambani Reliance Group alone.   And the assets of six airports, some profitable, controlled by the Airports Authority of India are now won by a group headed by Gautam Adani.

As per the Inequality Virus Report,  the Indian billionaires increased their wealth by 35% to Rs.3 trillion during the lockdown, ranking them behind their counterparts in the US, China, Germany, Russia and France. The wealth of just top 11 billionaires, during the pandemic could sustain the MGNREGS for the next 10 years. The 11 richest Indian industrialists have earned a profit of Rs.13 lakh crore during the Covid time.   Mukesh Ambai- the richest man in India and Asia- earned Rs..90 core an hour, during the lockdown, when around one-fourth of the people in the country could earn just Rs.3000/- per month. The increase in his wealth could keep 40 crores informal workers out of poverty for at least five months. Further, “only 6% of the poorest 20% have access to improved sanitation, compared to 93.4% of the top 20%" .  And 60 per cent of people live in a single room.

The Public Enterprises Survey Report says there were 348 central public sector undertakings as of March 2019, out of which 240 were operational. The Finance Minister Nirmala Sitaraman in her Budget for 2021-22, proposed to push ahead with privatization of state run firms, banks and an insurance company. She intends to complete the sales of PSUs- BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI, BEML, Pawan Hans, Neelanchal Ispat Nigam Ltd. etc., hoping to raise 1.75 lakh cores from disinvestment of state-run firms, keeping a bare minimum presence of PSUs in strategic sectors. The former Finance Minister P Chidambaram said: "this is a Budget for the rich, of the rich and by the rich. There is nothing for the poor …who continue to suffer. This is a Budget for those one per cent who control 73 per cent of India’s wealth.”

The privatization may be alright in the IT sector, software industry, retail and consumer sector, but indiscriminate privatization in the fields of education, public health, banking, agricultural etc. and handing over the vital sectors of economy to big Corporate Houses, in a massively poor and back ward country, where people look to the State for improving their living conditions is fraught with danger of corporatizing India. In 1996, the present ruling party opposed even 24% FDI in insurance companies, proposed by the UPA government, and now it invites 74% FDI in the insurance sector. It is not in the national interest to hand over the well established public sector banks to big private players.  After all, it was the public financial system that rescued the Indian economy during the world economic recess in 2008.

The rich people are not investing in India. They prefer to migrate abroad and invest in foreign countries to earn more profits.  In 2020, the year of pandemic, wealthy Indians topped the list of those wishing to migrate aboard and invest in foreign countries like Canada, Portugal, Austria, Malta and Turkey.  According to Henley & Partners- a global firm engaged in residence and citizenship planning- Indians are the second largest contingent among the millionaire category to move overseas.  Nearly 7,000 wealthy Indians left the country during 2019, with the NRIs interested in ‘citizenship-by-investment’ programmes. This is how the people who talk of patriotism end up.

The justification given for selling out the PSUs is that they are inefficient and not competitive enough. That is because of corruption, cumbersome rules and procedures, political interference, lack of support and archaic administrative structure. It is mismanagement. Therefore,better administration,not privatization,is a solution.  All said and done, the private players are interested only in profit making; they do not have any social obligation.  The State cannot abdicate its social responsibility of providing public utility services to the people, particularly the less fortunate, the poor and the marginalized. The economic growth without social justice is a misnomer. The State cannot pursue the policies to promote private sector, benefiting a few Corporates, when the masses do not get even the basic needs. The business and wealth of Ambani and Adani have gone up manifold. They are the one pocketing the  projects and reaping the benefits of government policies.

The priority of the government should be: (a) elimination of poverty, ignorance and disease;(b) ending social discrimination; (c) providing quality education and health services at affordable price;(d) combating violence against women and children and weaker sections;(e) generating jobs for the unemployed; and (f) ensuring communal harmony for peace and security. The privatization of public sector units that provide basic utility services is a misplaced priority.