By Krishna Jha
On the concluding day of the Bank strike on March 16, there was enthusiasm among not only the employees but millions all over the country. The participation was hundred percent, on both the days. About future course of action, they have told the government that if the privatisation bid is not rolled back, they would launch an agitation that would be as massive and long drawn as the one by the farmers.
The strike was massive with nine lakh bank employees taking to street in a two- day protest. Nine banks are facing privatisation. The unions are demanding roll back of the government decision and concentrate its efforts on strengthening the public sector. According to government data itself, 119 public sector units are earning profit for last five years continuously, and only thirty are running losses among the total of 366 public sector units. Same is true about airports also. There is the proposal for thirteen airports to be privatised which would be a combination of profitable and non profitable both. Among them are those that are considered best in the world.
\First is Indira Gandhi International Airport in Delhi. Then come the other four, that are Chhatrapati Shivaji International Airport in Mumbai, followed by Rajiv Gandhi International Airport, Hyderabad, International Airport in Bengaluru, and finally the International Airport in Chennai. The story however is not without its anti- climax. It would be in these very airports that the government has decided there would be shedding of stakes in AAI share. These are Mumbai, Hyderabad, Delhi and Bengaluru airports. It is to be done precisely to meet the target of its ambitious asset monetisation of Rs 20000 crore. Usually the reason given for privatisation of airports is that more revenue can be earned through minor stakes than those that are fully owned by the state.
According to the Civil Aviation Ministry, the plan to privatise 13 more airports would be monetised through the operation, management and development (OMD) model. The entire project is awaiting approval for disinvestment of equity shares of AAI in the joint venture of Delhi, Mumbai, Hyderabad and Bengaluru airports. After the approval, the government wants to sell remaining shareholding of AAI in these four key airports stakes.
The buck does not stop here. Now it is the turn of General Insurance, in which government holds 85.78 percent stake.
As the government has started mulling over the theme, the obstacles are also getting visible. It would not be easy to disinvest GIC since there are apart from United India, which is at the top for considering privatisation, there are three other general insurance companies in its folds, National Insurance, New India Assurance, and Oriental Assurance. It has been the general observation that if the government decides to privatise GIC, it has to leave the general reassurance business too. Then the privatisation itself has its own devastating consequences, and the consumer who is the target of production, bears the burden of ever growing prices.
The government equity in the form of AAI stakes is something that ensures the balance in terms of keeping user cost within reasonable limits. Once it is gone, government would not be able to intervene at any stage, and thus the decisive steps cannot be taken any more.
The government has set an ambitious target of around 3.5 lakh crore through asset monetisation in 2021-2022, comprising various asset categories across eight ministries.
It is proposed that NITI Aayog should take steps to identify twelve PSUs in these sectors for privatisation.
The NITI Aayog, according to sources has listed the PSUs primarily from among those comprised in public sector banks, and then the insurance companies.
The PSU disinvestment is rarely reviewed by the department of investment and public asset management (DIPAM). After getting the required approval, it would make a move to get principal approval from Cabinet Committee on Economic Affairs (CCEA).
The Finance minister in her Budget speech had announced that the government would privatise two banks together with general insurance company (GIC). The government declared without any mincing of words, its intention to exit management control and limit the list of PSUs in the country. The government intends to keep only a very limited number of core sector industries in its hands. The remaining ones would either get privatised, merged or closed.
The saffron regime has announced that the time for public sector units is over. They are getting obsolete, without any relevance in India. The government would now seek sources in listed PSUs that are primarily comprised in public sector banks, and then the insurance companies. But in all these ventures, Prime Minister Narendra Modi had declared that it was the duty of the government to help the enterprises to grow but it certainly is in no need to own them.
The question remains how the government would help if it has no stake. And its sole stake is people themselves, of which it is inalienable part, for which it is elected to serve.