Self Reliance – By Auctioning Public Sector Undertakings to Foreign Companies?!

Self reliance was the aspiration of our Independence struggle. The public sector was established and expanded to meet this aspiration of our people.

The Modi led BJP government has changed the meaning of ‘self reliance’. Its ‘Atmanirbhar Bharat Abhiyan’ is meant to make our country totally dependent on foreign companies and foreign countries.

The government has decided to completely liberalise the entry of foreign companies for Foreign Direct Investment (FDI) as well as Foreign Institutional Investment (FII). Indian companies will be allowed to freely list themselves in foreign jurisdiction thus permitting unhindered intervention of foreign capital including speculative capital in almost all sectors of our economy. This is bound to promote aggressive hostile foreign take over and control of crucial sectors of our economy as well as flight of domestic capital seeking speculative profits.

This is accompanied by wholesale privatisation embracing almost the entire public sector industrial and services network, eroding whatever self reliance has been attained during the over seven decades after independence. The BJP government made it clear that privatisation will be affected in all sectors of the economy; only one or maximum four PSUs will be allowed in each strategic sector in the future, to be notified by the government. No public sector undertaking will be spared from such come what may and at any cost privatisation drive. This will be done through global tenders, thus, further liberalising entry of foreign monopolies.

We cite here certain crucial sectors, as examples.

Defence: Defence production is being privatised through corporatisation, PPP is forced on the Ordnance Factory network; 74% FDI is allowed through automatic route. This will only lead to more dependence on foreign defence equipment companies, not self reliance. It will threaten our security preparedness. As seen in the Rafale aircraft deal, technology transfer provision is done away with. Similar deals with big foreign companies are in pipeline for naval frigates, submarines, missiles etc. The ultimate objective is to make our profit making defence sector PSUs, shipyards etc redundant or convert them into junior partners of the foreign companies and our country dependent on imperialist powers. On the other hand 41 Ordinance factories network along with Defence Research & Development Organisation (DRDO) will finally be pushed towards privatisation or more probably to redundancy increasing our import-dependence to the advantage of multinational armament giant companies. This is BJP’s brand of self reliance!

Coal: The BJP government is attempting multiple routes to privatise coal and other minerals sector. Commercial mining of coal, by private companies including foreign companies, is allowed through legislative changes and ordinances. The binding condition of captive mining for use by private companies has been done away with. Despite importing huge amounts of coal, restrictions on export of coal is going to be waived as a natural consequence. Coal is an essential input for industry, including electricity generation, steel, aluminium, cement, fertilisers etc. Complete deregulation of exploration and trading of coal will starve our domestic industries particularly crucial sectors like electricity, of this essential input. This in turn will adversely impact our domestic industrial production and economic self reliance.

Electricity: Electricity, most vital for industrial production as well as public consumption is being pushed for privatisation by the BJP government led by Modi. The Electricity Amendment Bill 2020 creates compulsion for state governments too to follow this disastrous route. Regulatory power is being centralised; subsidies for domestic consumers and agriculture will be phased out, increasing the burden of electricity charges.

Aviation: Not only Air India profit making airports are also being privatised. Already several of them have been handed over to the government’s favourite cronies. On the other hand Indian airspace will be more liberally allowed for the foreign flying companies virtually without any restriction. Domestic aviation industry is going to be seriously affected facing more foreign take-overs.  

Space Research: Every Indian feels proud of the hard work and tremendous achievements of our space scientists. Now these will be handed over, for making money, to the private corporates who haven’t spent a single paisa. Space research and atomic energy sectors will be privatised through the PPP route. National assets and intellectual property developed by investing huge public funds are now handed over to private corporates. Is this self reliance or transfer of public wealth for corporate profits?

Financial sector: It is the public sector banks and insurance companies that have considerably, though not fully, protected our country from the shocks of the global financial meltdown of 2008. These are now being sabotaged by the Modi’s BJP government. The BJP government has legalised deliberate loan defaults, mostly by major corporates, through the Insolvency and Bankruptcy Code Act. The public sector banks are forced, de facto, to forego 60%-70% of the total loan amount. This, in turn, has adversely impacted the much needed industrial credit particularly to the MSMEs and in turn the economic health of the country. Dubiously, the government is putting forward this as an excuse to privatise the public sector banks. The most successful Life Insurance Corporation of India is being forced to disinvest.

Similar systematic attempts are being made to destroy almost all public sector undertakings in the most crucial pharmaceutical sector, which had played a commendable role in producing affordable medicines for the common people in our country.

Indian Railways, the pride of India, serving the common people is being privatised through corporatisation of production units, handing over railway stations to corporates, allowing private passenger and freight trains etc. To facilitate this destructive process, the railway production units are being forced not to produce to their capacity while the essential equipments including coaches and engines have started being imported.   Even the railway operation in certain routes is being planned to be handed over to foreign operators.   

Obviously all these are being done to eliminate PSUs from the economic map of our country to satisfy the profit greedy private corporate including major foreign players, contractors and business interests.

This betrayal and disservice to the people and the nation is, in the dictionary of the BJP, ‘self reliance’! The time chosen by the government for fast tracking such fraud is the lockdown period, when the people and the workers are immobilised in the name of containing Covid 19!

This conspiracy on the nation cannot be tolerated by the working class, which builds the nation and protects it. These nefarious games have to be defeated and they will be defeated by the united struggles of the working class. It is possible to defeat this destructive game-plan by all out united intervention by the working class.

Published by Centre of Indian Trade Unions