September 08, 2019

Destructive Decisions of the Government

The following is the statement issued by the CITU on August 29

THE BJP government at the centre has taken some destructive decisions in the recent past. The RBI was forced to transfer of Rs 1.76 lakh crore from its reserves. This was done by the obliging team of bureaucrats put at the helm of RBI Board.

Another destructive feature is the concession given to big business class in the form of withdrawal of surcharge on direct tax and liberalisation of lending norms etc., reportedly for further incentivising them somewhere else. Such sops, at the cost of national exchequer are destined to fall flat; in fact, investment-growth has been consistently declining during the span of last five years of BJP rule despite showering of huge concessions on them every year through successive budgets and otherwise also.

The FDI has been further liberalised and clearance of FDI through automatic route has been recklessly expanded, covering all the strategic sectors of the economy, which will have more destructive impact on the economy instead of employment-oriented investment generation. Rather, such kind of FDI liberalisation, particularly in present global economic scenario will further pounce upon the economic sovereignty of the country.

Hundred per cent FDI in single-brand retail trade was justified by the previous BJP government front-lining the conditionality of 30 per cent sourcing of products from within India, claiming to have promoted the domestic manufacturing industry. Now, that conditionality has been totally eased, rather erased in favour of the foreign trading agencies, leaving room for widespread evasion, at the cost of domestic retail trade. The 30 per cent sourcing obligation can now be averaged over five years, opening the gates for evading the sourcing obligation for first three /four years and then change the sign-board of the company, a dubious practice, that has been continuing since long in almost all the special economic zones by the private business, including foreign entities.

Allowing 100 per cent FDI in coal-mining for all commercial purposes along with 100 per cent FDI in contract manufacturing-all through automatic route, will be a severe blow to national coal miner-the Coal India Limited (CIL), which has been creditably performing by consistently improving its production performance despite many hurdles created by the government itself.  Earlier, FDI was allowed only for captive mining. Now that barrier has also been removed allowing the foreign companies to capture control over country’s coal resources for commercial mining, including export.

This utterly retrograde move of the government on coal mining sector will deprive public sector-CIL, of the level playing field in respect of allocation of new coal bearing areas as well as in cost of production. Hundred percent foreign control of a substantial section of country’s coal reserves with a right to export will also severely hamper the protection of national priorities in meeting increasing domestic requirement of coal, both for household consumption and industrial requirement, particularly in power, steel, fertilisers and other sectors. And, under the present BJP regime, it is but natural that Coal India will be discriminated in respect of allocation of new coal bearing area for mining vis-à-vis the private and foreign players.

The government has declared its suicidal resolve to go for decisive privatisation of CPSUs through multi-pronged routes. Besides, strategic sale of major PSUs in steel, pharmaceutical, engineering and other sectors, aggressive steps have already been initiated to sell out around 60 per cent or more government equity of CPSUs in the market. The notoriety of the exercise is that the control of a large number of PSUs with huge asset base and capacity shall be captured by the private players and concerned CPSUs will be effectively converted into private companies through very small dose of disinvestment.

In order to realise the unprecedented divestment target of Rs 1.05 lakh crore, they have been dispensing with all norms and standing practices and resorting to suicidal shortcut.  The long sell off list reported in the media include all best performers in the strategic sectors – both physically and financially viz., IOC, NTPC, Power Grid, Oil India, GAIL, NALCO, BPCL, EIL, BEML etc. As a consequence of previous tranches of divestment, the present government’s equity holding of these CPSUs is around 52 per cent plus or little less. Therefore, the ugly game plan is to convert these CPSUs into private enterprises, by way of transfer of very small dose of shares to private hands. Country’s wealth will be transferred for private gains on a platter.

The CITU calls upon the working people and patriotic masses at large from all walks of life to raise their voice of protest against such destructive suicidal onslaught of the government of the day on the national economy. CITU also calls upon the working class, particularly those in the concerned sectors which are under immediate attack to unite and fight back these nefarious and anti-people designs and frontal attack on the economic sovereignty of the country.