The Debate over Privatisation: Is Mr. Modi Selling Public Sector Institutions for Personal Gain?

Privatisation is a multifaceted concept that has taken center stage in India's economic discourse. Initiated by the Congress government with the intention of streamlining operations and reducing fiscal deficits, the scope of privatisation expanded under the Modi government. However, these efforts have come under a significant amount of scrutiny, with critics alleging that the process is heavily biased towards certain business houses while compromising on the welfare of the public.

The Scope of Privatisation
Originally, privatisation under the previous governments primarily focused on non-profit making institutions. However, the current government's approach involves a broader range of entities, including public sector undertakings (PSUs) that are not only loss-making but also critical for employment generation. Critics argue that the high fiscal deficit and the repeated failure of PSUs to turn profitable are driving the government towards this path. Selling off assets is presented as a solution to bridge the fiscal gap, but the process has been marked by accusations of favoritism towards specific business conglomerates.

Concerns and Criticisms

One of the most contentious aspects of the privatisation drive is the disclosure of contracts and beneficiaries. For instance, the example of Sandeep Goenka's Goenka Group winning a Chandigarh projects contract despite active employee protests highlights the perceived cronyism in the process. This practice is viewed with suspicion, particularly when juxtaposed with the government's past promises of reducing job reservations by selling off public sector units.

Moreover, the general consensus is that the current government is focusing on enhancing private sector job opportunities to offset the scarcity of government jobs. However, policies like demonetisation and the implementation of GST have been criticized for exacerbating joblessness and poverty. The end goal, as claimed by critics, is to achieve joblessness and hence eliminate reservation requirements for government jobs.

The Historical Context of Privatisation

Privatization, as a concept, was introduced in 1991 under the tenure of PV Narasimha Rao, as a response to the over-regulated and socialist economy. The policy aimed to liberalize the country and foster a more capitalist economic framework. Consequently, the government began to sell off loss-performing PSUs, establishing a department dedicated to disinvestment from 1991 onwards.

The strategy of privatisation continued under various governments. For instance, under the Vajpayee government, Arun Shourie was appointed as the Minister for disinvestment, further solidifying the process. The campaigns by the BJP to sell off public sector units were funded by crony capitalists, including individuals like Mukesh Ambani and Gautam Adani.

Although the current government aims to continue this process, it is important to acknowledge the historical context and the consensus that privatisation is part of a long-term plan initiated several decades ago. The lack of long-term economic strategy under Mr. Modi and Nirmala Sitharaman has led to accusations that the process is driven by short-term benefits for specific business houses rather than genuine reform.

Conclusion

The privatisation trend in India is a complex issue with both supporters and detractors. While it aims to address fiscal deficits and inefficiencies in PSUs, the process has been marred by accusations of cronyism and the pursuit of short-term gains. As the debate continues, it is crucial to monitor the impact of these policies on the economy and the welfare of the public.