Don’t kill PSUs: Govt should act now

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The economy is in turmoil. Our administrative system is groping in the dark. The tax system, including toll, fee, charges and duties are becoming oppressive. Banks despite mergers are in crisis. The bid to sell institutions, industries, airlines which are suffering heavy losses is taking the country in to an abyss.

This is a matter of intense discussion as governance is drifting away from the governed. The State is becoming too powerful and is taking decisions not in favour of the voters but those who can manage votes.

The nation has to act holistically, discuss the problems and stop the slowdown from the portals of Parliament to all public fora.

Importantly, over the years the system is becoming myopic. It does not want to listen to the governed and comes out with decisions that hurt them more. Job losses are considered natural and the diagnosis is missing.

Their views are strange. A country creates jobs with people-friendly decisions but job losses are attributed to workers “lack of skills”. Atrocious income tax and GST rates are justified as the people’s holy duty but if they lose jobs, the State turns a blind eye. Social security steps like MNREGA or PM Kisan Samman Nidhi are not proving to be panacea.

Certainly, the remedy is not easy to find. The necessary dialogue with the people is missing. A powerful system does not enter into deliberation on critical issues. Occasionally a voice is heard in Parliament and State Assemblies hardly meet to hear their MLAs. The Chief Ministers even of failing Telangana, Andhra or Tamil Nadu are terrors. No member either of their Parties or Opposition can dare talk.

Unfortunately, the syndrome does not change with the change of regime. Every successive regime carries on the same way as the previous one. Changes are limited. It goes to a new set of supporters or hangers on. Democracy in provinces is limited to the rights of the Chief Minister whereby the Government machinery is a slave to the CM. As in States like Madhya Pradesh, it is alleged that the former and present heads run the show.

In such a situation, they invent methods to strengthen their families. Look at former UP Chief Minister Mulayam Singh’s family bastion Saifai which shines like a jewel at the cost of the State, while people continue to languish.

Such whims and fancies led to bifurcation of a thriving Andhra Pradesh. Its bifurcation into two States has resulted in Telangana being in a mess as the despotic Chief Minister K Chandrashekar Rao’s family hold is killing its economy. As it tried to privatise the State Road Transport Corporation (SRTC), its employees went on a 52-day strike. In many other States too, the SRTCs and other similar undertakings are being tried to be privatized so that influential families could benefit.

The disease is not restricted to the States. Similar despotic attitude by some Ministers led to the investment in faulty power programmes like Enron or collapse of the thriving Indian Airlines and Air India. The ostensible reason was to give a boost to a rising private airline or power industry which benefitted many families.

And in a short span Jet and Kingfisher-type airlines with huge debts from public sector banks (PSB) collapsed. Now Spicejet is in a crisis. In cases like these individual families with despotic patronage from the powers-that-be minted money and looted people’s savings. Consequently, the nation has lost due to such whimsical privatization at the cost of the profit-making public sector.

Pertinently, privatisation per se is not wrong. But to kill the public sector, built with taxpayers’ money for its sake is the sin the nation is being forced to pay for. Today’s slowdown, which Finance Minister Nirmala Sitharaman says is not recession, is natural. Even she is not taking steps to save the public sector under the strange pretext of the Government cannot do so.

This political attitude of “cannot do” has to change. Despite many follies of the leaders of 1950s-1980s, the public sector contributed to the nation’s economy. Institutions were built unlike systematic divestment and conspiracies against closure of many others including HMT (made fine watches and machine tools) has led the country to a Manmohanomics collapse!

With the rise of Manmohanomics another culture of interfering in the PSBs has led to the biggest swindling of banks, LIC, GIC and closure of many including UTI and IL&FS and consequent end of many smaller financial institutions.

No white paper on the loot of PSBs or financial institutions has come out yet. The nation’s knowledge is limited to the JPC report of the stock scams. The recent reasons of mergers details are partly known. Hence, a white paper is needed for the nation’s memory for corrective methods and plugging to stop such recurrence.

The Reserve Bank’s NPA reports are incomplete without going into the methods applied by various individuals or officials as is apparent from the PMC bank near-closure. The UP Employees Provident Fund lost Rs 1300 crores of workers’ funds and DHFL swindled Rs 46,000 crores poor people’s savings called retail investors.

In such a situation why RBI should cut rates instead of increasing them, is a wonder. It also needs to come out specifically on the note-ban decision.

Undeniably, this kind of unstructured decision has led to imposition of illicit road tolls for building roads to its normal standards. A culture of building bad non-toll roads has also crept in to justify tolls/ now being called fee. Think. Toll is a part of an exploitative multiple road tax— registration money, road tax, parking tax and now junking of vehicles to suit those in power or help the automobile industry. There is no reason to junk ten-year-old vehicles.

Each of these methods is killing the Indian economy as decisions are taken on ad hoc basis without a holistic approach. Look at job losses. These are the result of impractical experimentation with privatization and creating systematic leakage of public finances to boost it. The number of jobless has risen to 9.2% due to all these reasons. Even rural jobs are being lost and consumer purchasing power is officially dwindling.

That private corporates are not holy internationally has once again been established with the Competition Commission of India (CCI) probe into Tata Steel, Sweden’s SKF and Germany’s Schaeffler collusion of pricing bearings or Volkswagen pollution suppressing software.

In sum, the country has to correct the ills to be internationally competitive and have a people-oriented strong economy to sustain the targeted growth projections of the Modi Government. It must act now.

…INFA

 

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Shivaji Sarkar