The BJP-led government headed by Narendra Modi is stepping up the pace of the privatisation program. The target for sale of government shares in public companies has been raised from Rs.30,000 crores in 2015-16 to Rs.56,500 crores in 2016-17, and to Rs.72,500 crores in 2017-18. Many sectors which have so far been reserved for public ownership, including coal, defence production and railways, have been opened up to Indian and foreign private companies. Preparations are being made for outright sale of Air India and divestment of BSNL.
The capitalist offensive of privatisation involves handing over assets built with people’s money and vast natural resources and land to private monopolies. This increases the cost burden of essential services on the people, with the state abdicating its responsibility to provide essential infrastructure and other
The government is increasingly withdrawing from its responsibilities in providing essential services like health, education, power supply. On the one hand, it is not making the necessary investment in these sectors and in highways, airports and various civic services. On the other hand, it is inviting more and more private capital to enter these sectors. As a result the cost of education, health care and power have shot up enormously further burdening the people.
When the privatisation program was first launched about two decades ago, government spokesmen claimed that it was in the public interest to get rid of loss-making state-owned companies. They divided the state owned companies into “strategic” and “non strategic”, profit making and loss making and declared that only loss making “non strategic” companies would be privatised. Modern Food Industries Ltd, which was a profitable producer of nutritious bread, was deliberately made to suffer losses, so as to justify its sale in 2000. Hindustan Lever, a large private monopoly company, paid just Rs.105 crores to buy Modern Foods. It thereby became the owner of thousands of crores of real estate assets in prime locations in Delhi, Mumbai, Chennai, Bengaluru and Kolkata. The private owners of that capitalist company gained enormously from the massive loot of public property while actually closing down the bread making business.
Since then, every case of privatisation has shown that it not in the public interest. On the contrary, it is a program geared to fulfil the greed of the biggest capitalist monopoly houses.
The sale of Bharat Aluminium Company (BALCO) and Hindustan Zinc Ltd strengthened the monopoly position of the Vedanta group in the production of aluminium, lead and zinc. The Reliance group paid only Rs.1,491 crores to acquire the assets of Indian Petrochemicals Corporation Limited, whose value was estimated at Rs.10,000 crores. More over Reliance group achieved almost total monopoly in petrochemicals. The Tata group acquired control of Videsh Sanchar Nigam Ltd (VSNL) in 2002, and thereby gained a monopolistic position in internet and international calling services at that time.
All these early cases of privatisation exposed the lie that it is in the public interest. It led to a rise in the united opposition to privatisation on the part of all the central trade union federations. Faced with growing opposition by the working class, the capitalist class and the governments in their service have been resorting to more deceptive forms of privatisation over the past 15 years.
Instead of “strategic sale” of entire companies, they have followed the path of selling public assets bit by bit, under the banner of “disinvestment”. They have created space for private profiteers to take over the provision of essential services such as education, health, power, water supply, roads and bridges, under the banner of “public-private partnership”.
Privatisation has been pursued stealthily in the Indian Railways, in the form of outsourcing various functions to private operators. As a result, the number of workers employed by the Indian Railways has come down from 16,50,000 in 1991 to about 13,00,000 today. As many as 3,50,000 jobs have been cut. This includes critical functions such as those of the gangmen who play a key role in track maintenance. The Railways have been contracting out these services to private contractors, who deploy untrained personnel and take short cuts to make their profits. The safety of both workers and of rail passengers has been compromised for the sake of creating space for private profits.
The spokesmen of the capitalist class turn truth on its head by claiming that privatisation is the answer to the growing frequency of rail accidents. They hide the fact that it is privatisation, in the form of outsourcing of many essential functions to private companies, which is responsible for the decline in safety of rail travel.
Whether it is done in one stroke or bit by bit, selling public property and handing over public services to private profiteers is completely against the principle which Indian people hold dear – namely, that the State is duty bound to ensure prosperity and protection for all members of society. In other words, the privatisation program is against the general interests of society. It is anti-social.
The capitalist class and their politicians organise to deliberately convert profitable public enterprises into loss-making ones, so as to justify selling them to private bidders. They deliberately wreck the public sector enterprises which they want to privatise, and then turn around and declare them as
Today, the government has openly abandoned the distinction made twenty years ago when the privatisation program was launched, between “strategic sector” and “non-strategic sector”, and “profit making” versus “loss making” units. Public property that is being offered for sale to Indian and foreign private companies includes more than 60 units which supply equipment and weapons to the Indian armed forces. Bharat Earth Movers Ltd (BEML), a profit making defence Sector Company, has been put up for sale. Handing over of production of strategic weapons systems to Indian and foreign arms manufacturing monopolies or a collaboration between the two, is completely against interests of national sovereignty. Workers in the defence sector undertakings have correctly highlighted that the creation of a military industrial complex dominated by private monopolies is against national security and peace in the region. The program of privatisation is not only anti-social, but also anti-national.
Today, every case of blatant failure of the State to fulfil its duty to the public is being used by the capitalist class and its spokesmen to promote privatisation as being allegedly the solution. When more than 70 children died in a government hospital in Gorakhpur, TV news channels started promoting the view that “public-private partnership” is the solution. The Niti Aayog has recommended that both higher education and hospital services be treated as “for profit” sectors and not as essential services for which the State is responsible. Whereas in reality, private investment in education and hospitals has only led to very high costs of these services to people with no improvement in the quality of service.
The main aim of the privatisation program is to open up new avenues for the capitalist monopolies to loot the public and reap maximum profits. At the present time, Indian and international monopoly companies are greedily eyeing 157 central public sector companies in our county. The total profits generated by these companies in 2014-15 was about Rs.1,30,000 crores.
It is essential for the working class to expose the lies of the capitalist class and win the support of the broad masses of people for the struggle against privatisation. We must uphold the principle that productive assets created with public funds belong to the people and must be used in the public interest. The government has no right to sell what belongs to the people to any private company. The State is duty bound to ensure prosperity and protection for all.
The capitalist class considers profitability as the main yardstick of economic performance. The working class must reject this outlook. The performance of banks, of railways, power sector and of Air India, for instance, must be judged by how well they satisfy the people’s needs; and not by how high is their rate of profit.
The capitalist class and their politicians organise to deliberately convert profitable public enterprises into loss-making ones, so as to justify selling them to private bidders. They deliberately wreck the public sector enterprises which they want to privatise, and then turn around and declare them as “loss making”. They have been doing this with Air India, BSNL and other PSU’s. The workers in these sectors, and the working class as a whole must expose the wrecking activities the ruling class and its governments carry out as a prelude to privatisation.
In summary the capitalist offensive of privatisation involves handing over assets built with people’s money and vast natural resources and land to private monopolies. This increases the cost burden of essential services on the people, with the state abdicating its responsibility to provide essential infrastructure like roads, railways, public transport, power, education, health services, water supply and other civic services.
The problem with the existing economic system is that it is geared to fulfil capitalist greed and not to fulfil human needs. Production is highly social in character while the ownership of the means of production is private and highly concentrated in very few hands. The private profit motive dominates all sectors of the economy.
Capitalist monopoly houses dominate and control the Indian state. In the present system, the state sector monopolies too serve the interests of the monopoly capitalists as a whole to make maximum profits. In fact, it is the biggest capitalist monopolies like the Tatas and Birlas who first put forward the necessity for the Indian state to establish public sector units in different vital sectors of the economy as part of the famous “Tata Birla plan” which was marketed by the Congress party as “socialistic pattern of society”. The resources extracted from the people were used to set up the public sector, while the monopolies invested in those sectors where they could make maximum profits. Today, the Indian monopolies are demanding that the state sector be handed over to them for making maximum profits.
The solution to the problem requires a complete reorientation of the economy where the economy serves the interests of people and not the greed of monopoly capitalists. It is not enough for the State to own and control some enterprises. As long as the State itself is dominated by capitalist monopoly houses, the economy will remain oriented to fulfil their greed.
The solution requires that the working class must take political power in its hands, in alliance with the toiling majority of people. Only then can the economy be oriented to maximise the degree of fulfilment of the rising needs of the entire population, instead of being oriented to fulfil the greed of monopoly capitalists.
The means of production and exchange must be taken out of the hands of the monopoly capitalists and brought under social ownership and control. Social control means control by the people, with unionised and educated sections of workers at the head, making sure that all public enterprises are managed strictly in the public interest.
The working class must step up the struggle against privatisation with this revolutionary perspective!