Economic
Highlights
New Delhi, 2
December 2019
Don’t Kill PSUs
GOVT SHOULD ACT NOW
By Shivaji Sarkar
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
(Copyright,
India News & Feature Alliance)
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