Working class view on the economic reforms program

We, as a paper and organization partisan to the working class and toiling people, are asking the leaders of the toiling people what India Working think are the consequences of the reforms that were initiated 20 years ago. Have they benefited the working class and toiling masses? Have they harmed the working class and toiling masses?

We, as a paper and organization partisan to the working class and toiling people, are asking the leaders of the toiling people what India Working think are the consequences of the reforms that were initiated 20 years ago. Have they benefited the working class and toiling masses? Have they harmed the working class and toiling masses? In the October 16-31 issue of our paper, we initiated this feature with an interview with Comrade Lal Singh, the General Secretary of the Communist Ghadar Party of India. In this issue, we are carrying interviews with some of the leaders of workers from different sectors of the economy.

Interview with Comrade B.N. Bharadwaj, National Vice President, All India Loco Running Staff Association (AILRSA)

The new economic policies have really harmed the working class. Exploitation has intensified. When the new policy was announced in 1991, it was said that employment will increase, prices will come down etc. The promises have been proven false and the opposite has happened. Jobs are being lost and prices have risen astronomically. Previously, the workers in organized sector used to be protected, now the situation is the same in organized sector as well as unorganized. The rights of workers are being attacked. The work load is increasing because there is a reduction in workforce.

Government claims there is an 8% growth in GDP. It is happy with these figures. The actual figures are different. The number of people below the poverty line is increasing. Large numbers of people are being deprived of the basics of life -roti, kapdaaurmakaan. The inequalities are increasing.

The capitalist class is benefitting in the name of free market policies. There is no social planning. Everything has become a commodity. Human labour also is a commodity to be bought for minimum prices to make maximum profit.

Total wealth is increasing but at the same time inequalities are also increasing. We, the working class, have the right to improve the quality of life of our families and children. But we are unable to do that.

The working class should unite. We should unite at the unit level and industry level. Then we can achieve something. If we do not unite, the exploitation will increase.

Since the railway authorities are not forthcoming to settle our demands, the AILRSA has given a call for a country wide hunger fast from 15th November 2011.

Interview with Comrade Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation (MSBEF), Secretary, All India Bank Employees Association(AIBEA)

MEL Correspondent: Who in our society has benefited most from the liberalisation and privatisation program initiated 20 years ago when Manmohan Singh was Finance Minister in the Narasimha Rao government?

VU: We have consistently opposed the policies sought to be introduced since 1991. These policies, especially those that relate to the banking sector have been sought to be introduced under World Bank dictation. The Narasimhan Committee recommendations in 1991 were the first of these. Narasimhan was the Deputy Governor of the Reserve Bank of India and Chairman of HDFC.

If we take a historical look at the banking sector in India, the banking industry was regulated by the Banking Regulation Act 1949 and The State Bank of India Act 1955. Till 1969, the banks were in private hands. In 1969 many of the big banks were nationalised with the result that in 1991, 93% of all banking transactions were through public sector banks.

In 1991, we had 29 public sector banks, 40 private sector banks, 22 foreign banks, 2100 cooperative sector banks and 186 regional rural banks.

The public sector banks had an amount of capital that was fixed by the central government and all of them had a uniform rate of interest for lending and borrowing.

In 1991 as per the Narasimhan committee recommendations, prudential banking norms were introduced, according to which the amount of capital each bank could have was fixed as 9% of its risk weighted assets. This meant that the lending would be 10 times its capital base. Also as per these norms, the interest rates were deregulated and each bank could fix up its own interest rate. As per these norms the banks raised capital in the open market and the government’s share of ownership fell from 100% to 51%.

As a result of these policies, by 2001 12 public sector banks were in the red (making losses). Their capital was depleting and the NPA’s (non performing assets) or in simple words bad loans were increasing. By 2001 the NPA’s had increased to 20% of all outstanding loans.

We in the banking unions exposed this write off of loans to the big capitalists by calling them as NPA’s as being the main reason for the losses of the public sector banks and pushed for loan recovery and expropriation of the assets of the defaulters, among whom were many big capitalist houses. 

Due to pressure of the unions and the public awareness campaign that we launched, the Central Government was forced to announce in 1995 a Debt Recovery Tribunal. We published a list of defaulting NPA’s five times, the last time being in 2006. As a result of our exposures, the NPA’s have now come down to 3%. The capitalist houses took us to court for publishing their names. Manmohan Singh said that according to Banking Secrecy laws, the names of the defaulters could not be published.

In the banking industry there is increased tendency to outsourcing. The government wants to merge the public sector banks in the name of creating globally competitive banks. They have merged New Bank of India with Punjab National Bank. They have merged the State Bank of Saurashtra and State Bank of Indore with State Bank of India.

In 2011, all the public sector banks are in profit. They now have 73% of the total banking business, the rest 27% being shared between Indian private (20%) and foreign banks (7%).

12 new private banks have been added since 1995 with a minimum capital of Rs 100 crores. Out of these, 5 have collapsed leaving 7 remaining. In the 2010 budget, Finance Minister Pranab Mukherjee announced that new banking licenses would be issued with a minimum capital of Rs 500 crores.

However these private sector banks will not be interested in fulfilling social obligations. India has 600,000 villages. Today there are only 66,000 branches of banks, and most of these are in the cities and towns. Hence large sections of the rural population do not have accessible banking facilities.

We understand that the banking industry facilitates capitalist growth. However even within this system we are fighting to extend the benefits of this growth to the rural population as well as the downtrodden sections.

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