Union Budget: Deadly Push to Privatisation

Swadesh Dev Roye

A NATIONAL convention of central public sector workers was organised in Bengaluru on January 29, jointly by CITU, AITUC, HMS, INTUC, LPF, Joint Action Front (JAF), Bengaluru, and the Coordination Committee of CPSU Unions of Hyderabad. It was attended by more than four hundred leading representatives of trade unions from all the major central public sector undertakings (CPSU) in the country. But before we delve into the deliberation and decisions of the convention, it is of utmost importance to write on the gigantic event which was planned as precursor to the convention.

Organised by JAF on January 28, the city of Bengaluru witnessed a huge protest rally. For the first time in the recent past, more than eight thousand workers exclusively drawn from the CPSUs of Benguluru and Mysore -- BEML, HAL, BEL, BHEL, ITI, VISL Bhadravathi -- marched through the streets of the ‘Silicon Valley of India’ holding high the red flags, union banners and huge number of placards, shouting slogans against the anti-public sector policies of the Modi government. The rally ultimately culminated into a huge public meeting at the Freedom Park located at the centre of the city. The rally was addressed, amongst others, by INTUC president Sanjeeva Reddy, Tapan Sen of CITU, H Mahadevan of AITUC, and Meenakshi Sundaram of JAF.  

The agitating and motivating factors behind the huge mobilisation have been the Modi government’s aggressive drive of privatisation including ‘strategic sale’ of Bengaluru-based CPSUs which have been playing pivotal role in producing products having strategic importance in the country’s defence. The Indian missile and space programme is being supported by HAL and BEL. BEML is behind the manufacture of war vehicles like TATRA, and manufacturer of mining equipment. The crucial communication electronics required for modern warfare is produced by BEL. Warplanes used by IAF are either manufactured or maintained by HAL. Thus, disinvestment or privatisation of CPSUs like HAL, BEL and BEML is deeply dangerous to our national sovereignty and will directly wreak economic havoc.

On January 29, a day-long national convention was held at the indoor auditorium of BEL. INTUC president Reddy and CITU general secretary Tapan Sen delivered the inaugural and keynote address to the convention respectively. A total of 31 representatives took part in the deliberations. The impact of the destructive public sector policies of the Modi government in various CPSUs has been captured by the participants in course of the deliberations. Excerpts from the ‘Declaration’ and the action programmes adopted at the convention are reproduced below:  

 

Multiple Attacks: Privatisation, Closure and Liquidation of CPSUs

It is extremely shocking and deeply condemnable that the Modi government has launched a mad drive through dubious commercial routes to sell more CPSU equities and increase the total collection of fund by further selling of CPSU equities within the remaining days of the current financial year.

An ill-conceived instrument called Exchange Traded Fund (ETF) has been pressed into aggressive play by the government with the short-sighted intention of quick sell off bypassing important commercial and administrative procedures brazenly sacrificing the interest of the CPSUs concerned.  As per media reports, the government has targeted to collect Rs 6,000 crore under this category of equity selling and the bids worth Rs 13,726 crore are under processing. The present CPSE ETF is a basket of 10 maharatna/navratna companies: ONGC, GAIL, Coal India, REC, Oil India, IOC, Power Finance Corp, Container Corp., Bharat Electronics and Engineers India. It is revealing and appalling that Reliance Mutual Fund managers have been appointed by the Modi government to provide consultancy and execute the ‘project privatisation’ of the strategic CPSUs.

Promoted and funded by the government, an agency called National Institute of Public Finance and Policy (NIPFP) has submitted a paper to the NDA government drawing therein a dangerous blueprint for elimination of India’s CPSUs. It has suggested, “The way forward is more aggressive privatisation – especially for the 17 Navratnas, the 73 miniratnas and the other 140 smaller PSUs which are not even in the ratna category. Only then will be PM’s words that ‘the business of government is no business’ have some meaning.”

The NIPFP has recommended adoption of “a 10-year plan to divest at least 50% PSU assets … An ad hoc expediency based on yearly targets is not going to work”. Relevant to recall that the NITI Aayog has already submitted a list of 74 CPSUs, including many in the ‘ratna’ category, to the PMO recommending privatisation.

The government has already sold out 46% of equity of BEML Bengaluru connected with defence production and now execution of the decision to further 25% strategic sale is under process. That means the Modi government has decided to hand over BEML to private corporate – indigenous or foreign. Another core sector maharatna CPSU under serious attack is SAIL. Strategic sale of Salem, Durgapur and Bhadravathi steel plants has been decided by the government. Shockingly 67 discovered oil fields of ONGC and Oil India are being processed for privatisation. The government has declared to disinvest 25% shares in all the five public-sector general insurance companies to private hands including foreign companies, and in that direction the government has decided to list those companies in the stock exchanges. Moreover, the NDA government has also decided to windup IDPL, RDPL and to privatise Hindustan Antibiotics and Bengal Chemical and Pharmaceutical Limited.  

It is necessary to recall that 100% FDI in strategic and sensitive sectors like defence, coal, petroleum, mining, power, telecom, civil aviation, satellites, construction, insurance, pension funds, PSU banking, railway operations and maintenance, multi-brand retail and pharmaceuticals has already been cleared by the government. Ironically, the Prime Minister has proudly proclaimed that India has now become one of “the most open economies in the world and strongly committed to continue such policies in the name of ‘reforms”.

 

Union Budget 2017-18

The Union Budget for the next financial year presented in the Parliament has given a deadly push to privatise the public sector entities. An all-time high target to collect an amount of Rs 72,500 crore by both partial and full privatisation of CPSUs has been provided in the budget. It is clear, for realising such huge amount, the government shall resort to strategic sale and massive equity disinvestment in maximum CPSUs. The rail PSUs and general insurance companies are already identified targets. It appears the Modi government is desperate to hammer the last nail in the coffin of CPSUs.

Right from the day of presenting the budget, onslaught on public sector has been launched by the government.  During his conversation with media after presentation of the budget, the Finance Minister is reported to have said, “The government will put out a mechanism to list all public sector enterprises in a time bound manner and launch another exchange traded fund with diversified PSUs to achieve the target.” The Secretary to the Coal Ministry has announcement decision to auction 25 coal mines. Again, 250 non-coal mining areas will also be put to auction shortly. The real intention of the government to create integrated public sector oil company by merging the oil CPSUs shall come into open in due course. However, once it is an ‘integrated oil behemoth’, private international oil giants shall be certainly attracted in the game of privatisation.    

The budget proposals are bound to slash down capital expenditure by CPSUs. Because the Modi government has not only been compelling CPSUs to pay abnormally high dividends but even the investible reserve funds of the CPSUs are also recklessly siphoned off by the government.

 

Accelerating Attack of Contractorisation

Given the alarming acceleration of the extremely exploitative phenomenon of contractorisation and inhuman plight of contract workers despite being employed in the most organised public sector industries, it is high time that at least public sector trade union movement, as a whole as well as sector-wise, irrespective of affiliations, must unite and come on the street to launch short-term and long-term struggle with immediate and ultimate twin objectives. Contract work force has already attained extra ordinary numerical and strategic strength in PSUs as a whole. This situation calls for more close cooperation between regular and contract workers. Despite huge contribution of contract workers in the production, productivity and profitability of the PSUs concerned, they are victims of despicable exploitation in the matter of terms and conditions of employment including wages and benefits, social security and safety. In the light of the recent Supreme Court judgment, the entire trade union movement of the country must take up the matter with all seriousness for implementation of equal pay for equal work in a massive way.  

 

Forthcoming Wage Negotiations in CPSUs

The 3RD Pay Revision Committee (3rd PRC) for executive cadre employees of CPSUs chaired by Retd. Justice Satish Chandra has submitted its report, unprecedentedly, to the Prime Minister’s Office. A studied silence is continuing over the recommendations of the committee.  This can be called ‘lull before storm’. It is gathered that the government has appointed a Committee of Secretaries to study the 3rd PRC report. In the meantime, trade unions have started submitting charter of demands for negotiating the next pay revision to be effective from January 1, 2017.

 

Call of the Convention

The convention has decided to launch a long phase of campaign, propaganda and agitation vehemently opposing all kinds of disinvestment of CPSU equities, no strategic sale/disinvestment, a firm no to partial and/or complete privatisation of any CPSU, no dissolution of BIFR and AIFR and exhaustive and effective steps to revive sick CPUS in complete public sector ownership. It reiterated the basic working class demand of unfettered right to collective bargaining, particularly in view of the forthcoming LTS negotiations. The convention decided holding joint industry/sector/PSU specific covention/seminar/meetings at local, regional and national levels within February 28; literature campaign, gate meetings, dharna before main gate of the respective establishments, slogan shouting during recess hour and end of duty hour to be completed by March 20, and observing All India Protest Day on March 30.

A national seminar will be organised in New Delhi during the second half of the Budget Session of Parliament. Finally, the convention appealed to all workers irrespective of affiliation to prepare for a nationwide strike. 

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