Budget 2020: Acceleration of privatisation to boost profit of capitalists

The budget has planned to escalate the scale of privatization and disinvestment. Some of the privatization plans announced are:

  1. In 112 districts, private medical colleges will be set up on Public Private Partnership (PPP) model and district hospitals will be attached to them.
  2. Five new smart cities will be developed under the PPP mode.
  3. Creation of warehouses for agricultural products will be carried out through PPP model.
  4. At least one major existing port will be privatised.
  5. Smart electricity meters will be installed to prepare the ground for large-scale privatisation of electricity distribution as they would make it possible for consumers to choose the supplier as well as the rate.
  6. The balance share-holding of 46.46 percent of the Central Government in IDBI Bank will be sold. Government has already sold its 51 percent share-holding in IDBI Bank in 2018-19.
  7. The plan to list on the stock market and begin disinvestment of 100% government owned LIC is of serious concern to people. LIC not only manages huge amount of savings of people but is also one of the largest investors in both public and private sector companies. The future of every individual who puts in his life savings in the insurance company will be at stake once it is privatised. Its privatisation is being opposed by All India Insurance Employees’ Association as well as BMS which is affiliated to the BJP.
  8. Through the sale of shares of IDBI and LIC, the government has planned to earn Rs 90,000 crore. A further Rs. 1,20,000 crore will be earned through the planned sale of Air India, BPCL and other public sector units and divestment of shares.
  9. The step by step privatisation of Indian Railways is being accelerated. More private trains like Tejas will be run. Refrigerated Kisan Rail for transport of perishable goods will be run through PPP model. The redevelopment of New Delhi station and Mumbai’s CSMT  terminus will be offered to private players within next three months. Bids for running 150 private trains will be finalised during 2020-21.

Privatisation has been pursued despite strong opposition by workers due to anticipated loss of jobs.  Consumers of public services are opposing privatisation as it would make many services out of their reach. Both workers and consumers are asking what right government has to hand over assets built with public money for private profit without asking people. They are demanding that government must fulfil its basic duty to provide essential services to all at affordable prices. The privatisation of essential services like electricity, water, sanitation, transport, education, health would deprive large number of people of these services and make them unaffordable to many more.

Despite the opposition of people, privatization has been accelerated in the last few years as the capitalists’ profits have come under pressure. While the sale of assets built with public money has been going on since the policy of globalisation through liberalisation and privatisation was launched in 1991, the State is opening up newer and newer areas for private profit. The privatisation of strategic areas like defence production, petroleum products, insurance, railways, electricity distribution is being pushed.

When capitalists are not able to produce and sell more to increase their profit due to lack of purchasing power of people, acquiring public sector companies, partly or wholly, is an easy way of increasing their profit. This is the reason for big emphasis on privatization and disinvestment in the budget.

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