Nothing might have comforted Dr. Manmohan Singh so much as the post-elections milieu that allowed him to run the UPA-II government without the Left support. The architect of neoliberalism in India, Dr. Singh, and his protégé, Mr. Chidambaram, who acted as Finance Minister in the previous government were bemoaning tirelessly – that the Left parties are putting spokes in the “reforms” process. So, after the victory of the Congress Party in the general elections, the onset of gung-ho reforms was not unpredicted. It is bizarre however, that the Congress is showcasing the electoral mandate as an endorsement to its neoliberal policies… camouflaging the truth that Indians voted actually – for stability, continuity and against communalism.
The President’s joint address to both the Houses of Parliament gave the first glimpse of UPA-II government’s intent to unleash all the pending ‘reforms’. Her speech drafted cautiously by the Manmohan team has tried to cheer up the aam admi by promising inclusive growth… at the same time telling in no uncertain terms that neoliberal reforms are imminent. In any case, the globalisation process driven by the World Bank, IMF and WTO could not have waited for a more favourable time to gallop.
FDI IN EDUCATION
The HRD Minister Kapil Sibal has announced a 100-day roadmap for education reforms. Although his mantra to make the 10th class examinations ‘optional’ and replace the existing marks system with ‘Grades’ has caught the media attention – there is more to his plan than meets the eye! Allowing foreign direct investment (FDI) in education is at the top of his mind. The minister said he would take forward the Foreign Educational Institutions (Regulations of Entry and Operations, Maintenance of Quality and Prevention of Commercialisation) Bill, which was cleared by the Cabinet in February 2007. The Left had opposed the Bill stating that it was a subterfuge to allow FDI in education. This time, with sufficient number in the Parliament – Mr. Sibal hopes a cakewalk to push the reforms (read FDI in education).
Mr. Sibal who studied at the Harvard Law School has tried to justify his decision to allow foreign universities into the country. “After all, every year 160,000 children go abroad from India at an overall cost of seven billion dollars… why should we send our children out? Foreign universities can come at our doorstep,” he says. The Right to Education Bill is a charade – because after a bunch of foreign universities open their shops in the country – the unbridled commoditisation of education would overshadow the social obligation of the government.
RAILWAYS – SHEDDING STATE OWNERSHIP
Mamata Banerjee did a Lalu Prasad in not hiking the passenger fares. She also gave the aam admi touch to her Budget by announcing “Izzat” scheme for the people of the unorganised sector. But behind the aam admi curtain, the surrender to the India.inc by setting aside a lion’s share in the national revenue was clearly seen. Public-Private Partnership (PPP) is the buzzword now to conceal the rhetoric viz., ‘privatisation’ and ‘outsourcing’. The Railway Minister has promised to develop 50 “world class” facilities on public-private partnership model. Also “multi-functional complexes with shopping facilities, food stalls and hotels will be constructed on public-private partnership,” she said. By shedding her anti-industry image quickly, Mamata announced a coach factory to be set up in West Bengal – with private partnership. What’s more…Railway Medical colleges and hospitals would be managed through public-private partnership model.
SURVEY UNVEILS MANMOHAN AGENDA
The Economic Survey for 2008-09 presented to Parliament ahead of the Union Budget has recommended extensive reforms – viz., public sector disinvestments, deregulation of petrol and diesel prices, decontrol of sugar, fertilizers, drugs et al. On the FDI front, the survey sought a reduced role for the government, end of State monopoly in areas like the Railways, coal and nuclear power and up to 49 per cent foreign equity in defence and insurance. It also suggested FDI in multi-brand retailing. Suggesting faster reforms in the banking sector, the Survey said the government should amend the laws to align voting rights in banks with equity holdings, apart from raising FDI limits. The Survey has also suggested major reforms for the telecom sector including auctioning of 3G Spectrum for mobile services.
The most alarming proposal in the Survey was the disinvestment of 5 to 10 percent equity in all unlisted public sector undertakings. The Survey calls for mopping up Rs.25000 crore annually through selling of equities in PSUs. The Survey brazenly advocates auctioning of all the loss making PSUs that ‘cannot be revived’.
KILLING THE GOOSE FOR GOLDEN EGGS!
The Finance Minister in his Budget speech cited ‘Kautilya’ a couple of times… as though he drew inspiration from the great strategist from third century B.C. Interestingly, Kautilya, the author of the famous Sanskrit treatise on political science Arthashastra is also known for intrigue and trickery. To understand as to how Pranab Mukherjee tried to play tricks in his Budget proposals, one need to look beyond the eye-catching drape – i.e., increased outlay to NREGA which promises to provide a daily wage of Rs.100 for at least 100 days to about 4.47 crore households and the Food Security Act, which promises supply of 25 kilograms of rice or wheat at Rs.3/kg to the BPL families. These flagship programmes, which are intended to keep the aam admi in good humour, are indeed welcome measures. But the irony is that, the Finance Minister has found an excuse to sell the equities in public sector enterprises to muster resources for the social security schemes.
Defending his decision to disinvest the PSUs, Mr. Mukherjee said: “The PSUs are the wealth of the nation, and part of this wealth should rest in the hands of the people. While retaining at least 51 per cent government equity in our enterprises, I propose to encourage people’s participation in our disinvestments programme.” However, the statistics from the time when the disinvestments started in 1991 would reveal – that the “wealth of the nation” has not gone “in the hands of the people” but was always usurped by the rich and the powerful. Fifty-one per cent stakes in Bharat Aluminium Co (Balco) were sold to Sterlite Industries in March 2001 for a paltry sum of Rs 551.50 crore. The Centaur Hotel in Mumbai was sold for a throwaway price and none other than Comptroller and Auditor General (CAG) raised doubts over the deal. The cash-rich public sector VSNL which was making Rs.800 crore profits every year was bought over by TATA Group which subsequently changed its name as Tata Consultancy Services (TCS). These are all the tip of the iceberg.
Let us imagine…selling the equities in PSUs is the panacea to overcome the fiscal deficit. How much time does it take to siphon-off the 49% stakes? (the highest percentage earmarked by Finance Minister in the Budget). It will be wiped out in the next 10 years, if the Economic Survey recommendations to liquidate 5-10 per cent every year are implemented. What to do next after the Family Silver is exhausted? Is selling the profit-making PSUs not akin to killing the goose for golden eggs?
AWFUL CHAPTER
The National Commission for Enterprises in the Unorganised Sector (NCEUS) reported that 77 per cent Indians are living under Rs.20 a day. This unsavoury truth flies in the face of Dr. Manmohan Singh, who had promised the fruits of his reforms to ‘trickle down’ to the poor. The awful chapter of agricultural disaster was also the corollary to the neoliberal agenda started by him in 1991. After the nationalisation of banks in 1969, agriculture and small-scale industries had been treated as priority sectors, which received institutional credit at easier rates of interest. All these facilities had been scrapped in 1994 based upon the M. Narasimhan Committee Report on financial liberalisation – which redefined “priority sector” to include large institutional borrowers – that led to farmers and small producers being denied bank credit. A relatively well-functioning agriculture sector until the 1990s is in disarray now – with food output becoming stagnant and thousands of farmers driven to commit suicide.
The saga of reforms in India had always been pro-rich and anti-poor. The gap between the ‘haves’ and ‘have-nots’ has widened during the globalisation era as never before. Let Good Samaritan prevail upon the Dr. Manmohan Singh government to put the neoliberal reforms on hold.