The objective is neither people’s ownership nor resource crunch. It is much deeper in the ideological concept in free market economy where public sector has no place. The objective is only privatisation i.e. change of ownership of PSUs. The routes are different – “BJP” way of what the Congress calls “blind privatisation” or the “Congress” route of “privatization through back door” under a different nomenclature viz, people’s ownership.

A manual titled “Disinvestment Policy and Procedures” was published by Ministry of Disinvestment during NDA regime. The manual dealt elaborately with two issues “why to privatise” and “how to privatise”. In the introduction to the manual it said:

“Privatisation has different nomenclature in different countries like disinvestment, peoplisation, popular capitalism, denationalisation, economic democratization, partners in development, asset sales programme, dis-incorporation, transformation and restructuring. In this manual words privatization and disinvestment has been used interchangeably.”

The operationalisation of the manual was shelved when UPA Government came to power in 2004 because of the opposition of Left parties who were supporting the Government from outside and Ministry of Disinvestment itself was disbanded. But Congress Party which initiated the disinvestment process in 1991 was never reconciled and egged on by the private corporate group who aided financially both Congress and BJP during the 2009 election, it came up with new nomenclature or formulation to fulfill its earlier objective of disinvestment. It added a new word “people’s ownership” to justify disinvestment/privatization. The word “peoplisation” in the manual has now been replaced with “peoples’ ownership”. Whatever be the word, the content remains the same i.e. how to privatise. Congress manifesto tries to demarcate itself from BJP by saying:

“The Indian National Congress rejects the policy of blind privatization followed by the BJP-led NDA Government but believes that, the Indian people have every right to own part of shares of public sector companies while Government retains majority “share holding”.

So BJP was blindly privatizing. Congress will do it keeping its eyes open by selling shares in phases instead of doing at one go. After all what does “people’s right to own part of shares” mean? People of the country already own all shares of PSUs through Parliament. People of the country elect their representatives in Parliament and through Parliament elect a Government. Public Sector enterprise is owned by the Government and not by the Government of the day. People’s ownership in PSU is ensured through Parliament, elected by the people. The ownership of the people through Parliament can not be diluted by ownership of a few people through share market. The fallacy of this newly coined word of “people’s ownership” to conceal the process of “creeping privatization” i.e. privatization in phases, becomes clear if one looks at the disinvestment of shares of M/s BHEL, a navaratna PSU carried out by the Congress Government during 1991 – 1996 when Dr. Manmohan Singh, as the Finance Minister initiated the process of selling shares. Plea was same i.e. shares would be sold to retail investors in share markets and the workers of the disinvested PSU etc etc. The present share holding pattern of BHEL exposes the fallacy and real intent of such disinvestment.

BHEL’s Share Holding Pattern

The above clearly shows that in the name of people’s/ workers’ ownership of shares, about 21 per cent shares were handed over to FIIs and private corporates and the so-called people’s share was only 1.92 per cent. Similar was the case of NTPC and other blue chip PSUs, where FIIs and private corporate grabbed most of shares, disinvested through this process. The UPA-II Government now wants to repeat the same exercise under the name of people’s ownership through share market. Instead of 120 crore Indians owning public sector enterprises through Parliament, it now wants less than a crore people owning the same through share market. Share market has become now more powerful than the Parliament.

UPA GOVERNMENT’S RECORD WITH PSU RESOURCES

The reserve and surplus of Central Public Sector Undertakings was Rs. 2.59 lakh crore in 2003 – 2004 when UPA Government came to power. The same has gone up by another 2.26 lakh crore to Rs. 4.85 lakh crore in 2007 – 2008. Who stopped them to use this amount of Rs. 2.26 lakh crore for any productive purposes, including social sector? As a matter of fact, out of this huge reserve and surplus an amount of Rs. 1.42 lakh crore is being utilised in non-productive financial investments. For example, NTPC, a navaratna PSU as on 31.03.2008 was having cash and bank balance of Rs. 14,933 crore, out of reserve and surplus of Rs. 44,393 crore? Do you have to sell share of Rs. 10000 to 15000 crore, keeping this huge money locked in non-productive reserves?

The pet answer is that – these reserves are for their expansion and future projects. Is that true? No. No one invests all his money whether capital or reserve to run a business or starts a project. Investor puts a part as equity from his/her pocket and borrows the rest from banks as debt. For all big private sector players Government is now permitting 4:1 debt equity structures i.e. for every one rupee investment the private sector can borrow 4 rupees from the banks and FIs. They are therefore low equity (i.e. their own investment) and high debt company, with debts borrowed mainly from public sector banks and FIs. On the contrary the Public Sector Enterprises have high equity and low debt. At a time, when banks are having huge funds at their disposal, Government owned PSUs can borrow from banks based on present debt equity position. As on date PSUs together have a debt equity ratio of 0.75 i.e. for every one rupee investment they are taking 75 paise as debt from banks and FIs as against Rs. 4 of debt drawn by big private companies for each rupee invested by them. To be more precise, as per latest Public Enterprise Survey 2007 – 2008, PSUs have equity of more than Rs. 6 lakh crore. The PSUs therefore in the line of private sector can borrow safely an amount of Rs. 15 – 20 lakh crore from the banks and FIs without shedding any equity shares i.e. without any disinvestment. Who stops the Government from doing so? Why then should the Government go for selling shares of a petty amount of Rs. 20-30 thousand crores? Is there any economic logic excepting diversion of disinvested money to share market for speculative purpose instead of building assets? PSUs have paid a dividend of Rs. 28,081 crore in 2007 – 2008 to the Government which in turn is used for the people of the country. After disinvestment this amount of dividend also will go down. Who gains? Not the aam admi but the Khaas admi in share market. During 2007 – 2008 PSUs have earned a profit of Rs. 79,803 crore after paying tax of Rs. 42,000 crore. Instead of using this profit for creating new productive asset, why their existing assets should be sold through shares in the name of “people’s ownership”?

PRIVATISATION THROUGH BACKDOOR INSTEAD OF BLIND PRIVATISATION

The objective is neither people’s ownership nor resource crunch. It is much deeper in the ideological concept in free market economy where public sector has no place. The objective is only privatisation i.e. change of ownership of PSUs. The routes are different – “BJP” way of what the Congress calls “blind privatisation” or the “Congress” route of “privatization through back door” under a different nomenclature viz, people’s ownership. All Central Trade Union including INTUC and BMS have opposed disinvestment in unambiguous terms. The Government of the day, therefore has no right to pursue the neo-liberal path of disinvestment only with support of a few private corporates and their captive media, ignoring the economic logic and public opinion.