23 years after the privatisation of Modern Foods:
Unite and defeat the privatisation program of the bourgeoisie

In February 2000, the workers of Modern Foods India Limited, led by Mazdoor Ekta Committee, carried out a bold protest action in New Delhi on the opening day of Parliament. They were protesting the sale of the central government owned Modern Foods to the private multinational company, Hindustan Lever.

modern-food-industries-employess-union-demoThe workers of Modern Foods were joined by textile workers from Kanpur, who were facing closure and fighting for reopening of their mills. That joint action 23 years ago marked an important milestone in the struggle of the Indian working class against the privatisation program of the bourgeoisie. It is important to recall the lessons of that struggle today, as the ruling bourgeoisie is rushing ahead with the sale of state-owned assets to private companies, using diverse methods and justifications.

The NDA government of Vajpayee had announced the decision to sell Modern Foods and Bharat Aluminium Company (BALCO) on the eve of the World Economic Summit at Davos in January 2000. Through that announcement, the Indian ruling class declared to the world its commitment to the path of privatisation of state-owned enterprises and services, in the interests of Indian and foreign monopoly capitalists.

modern-food-industries-employess-union-demoPrior to that announcement, the Disinvestment Commission set up by the United Front Government of Deve Gowda had categorised public sector units into strategic (including defence, atomic energy, rail transport and telecommunication), core (including petroleum, coal and steel) and other units. The official line was that only those units which were not categorised as either core or strategic would be privatised. The aim of categorising the public sector enterprises in this manner was to cover up the real aim of the privatisation program and create the false impression that it was allegedly for the benefit of all.

When Modern Foods was put up for sale, the then government declared “It is not the business of the government to make bread”. Twenty years later, the government has put up all public sector enterprises for sale, declaring “it is not the business of the government to be in business”.

The leaders of many central trade union federations accepted the privatisation of Modern Foods in 2000.  They conciliated with the bourgeois propaganda that it was not a strategic industry and that it was loss making. They were advising the workers that it was best for them to accept a VRS package and quit. It was in such difficult conditions that the workers of Modern Foods, inspired by Mazdoor Ekta Committee, heroically unfurled the banner of uncompromising struggle against privatisation.  It was a struggle that opened the eyes of workers in many sectors.

modern-food-industries-employess-union-demoFor seven years on end, till the last worker was thrown out of his job, the workers of the main plant of Modern Foods in India, the unit in Lawrence Road in Delhi, rallied the 3000 regular and contract workers of the company all over the country to take up the struggle against privatisation.

Mazdoor Ekta Committee exposed how Modern Foods, a profit-making enterprise, had been deliberately turned into a loss making one, in order to justify its privatization.

Mazdoor Ekta Committee and the Modern Foods Employees Union exposed how the movable and immovable assets of the company, which were valued at over Rs 2000 crores, were handed over to the multinational Hindustan Lever for a mere Rs 124 crores. They exposed the lie that Hindustan Lever would run the company “efficiently”. They showed how the multinational company was stripping the assets of Modern Foods.  It was using the brand name of Modern Bread while outsourcing its production, in unhygienic conditions.

The workers of Modern Foods waged numerous forms of struggle, including protest demonstrations in front of parliament, appeals to members of parliament and to the Delhi Government. They sat on dharna at the factory gate for nearly two years.

modern-food-industries-employess-union-demoThe example set by the workers of Modern Foods inspired the workers of Bharat Aluminium Company (BALCO) and the trade unions of electricity board workers in various states to join the movement against the privatisation program. The struggle gained momentum. It forced the Vajpayee government to set up a Prime Minister’s special committee in October 2002, to investigate the consequences of privatisation.

Mazdoor Ekta Committee and Modern Foods Union submitted to the committee documentary evidence of how the Hindustan Lever management was liquidating the plant and machinery, resorting to subcontracting, using contract labour in place of the regular workers, and violating all labour laws.

When the Special Committee submitted its report to the government in September 2004, the union demanded that the report be placed before parliament and discussed. However, the UPA government headed by Prime Minister Manmohan Singh stonewalled this demand.

To fool the workers, the UPA government declared that there would be no more outright sale of public sector enterprises. The Communist Party of India and the Communist Party of India (Marxist) extended support to the UPA government on the basis of a Common Minimum Program. This led to the spread of illusions among workers that the central government would now implement capitalist reforms with a “human face”. The illusion was spread that there would be no more privatisation.  In actual fact, the government took a different route to privatisation. Instead of outright sale, privatisation was carried out gradually, by selling shares of public sector companies.

Today, 23 years after the workers of Modern Foods launched their historic struggle against privatisation, the times are calling on the working class to draw some crucial lessons.

modern-food-industries-employess-union-demoOne important lesson is that there is no justification for privatisation of any public enterprise, irrespective of whether it is a “core” enterprise, of strategic value or whether it is “loss making”.  In all cases, privatisation only serves the interests of profit hungry capitalists.  It is not possible to implement privatisation with a “human face”.  It is an anti-worker and anti-social program.

Another important lesson is that privatisation is not the preferred policy of a particular party or government.  It is the preferred program of the ruling class in the present period.  In the early decades after Indian independence, the establishment of state-owned industries served the interests of the big capitalists of our country.  However, since the 1990s, the big capitalists who have grown into huge monopolies are eager to convert state-owned assets into their private property.

In the 1950s, 1960s and 1970s, the policy of creating and expanding state-owned heavy industry, state-owned banks and insurance companies, served to create the infrastructure for capitalist industrialisation.  It served to expand the home market for capitalism and to guarantee maximum profits for the monopoly capitalists. In the present period, the pursuit of maximum monopoly profits is being served by the agenda of globalisation, through privatisation and liberalisation.

For over 30 years, every successive government has taken forward the program of globalisation, through liberalisation and privatisation. It is a harmful illusion to think that privatisation can be halted or reversed by replacing the BJP by the Congress Party or some other bourgeois party.

The program of the working class is to reorient the entire system of production of goods and services towards the aim of fulfilling social need, instead of fulfilling capitalist greed. In order to realise this program, the rule of the bourgeoisie needs to be replaced with the rule of the working class in alliance with the toiling peasantry. Communists must provide leadership to the working class in waging the struggle against privatisation with this aim.

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