IN DEFENCE OF PUBLIC SECTOR

Owners Have To Sack The Disloyal Managers  

Sitaram Yechury

MAY 21, 2003 saw the largest ever strike action by the working class in independent India.  One of the issues was the protest against privatisation of public sector undertakings by this Vajpayee government. On that very day, in one of the private TV channel's studio, I was asked by the representative of the CII and the anchor conducting the discussion as to what the job of the government was: To serve, or to run business?  They were actually paraphrasing Margaret Thacher, who had, in the eighties, while embarking on the dismantling of Britain's public sector, infamously remarked, "It is not the business of the government to be in business." 

The government's job is, of course, to serve. But to serve whom? The people at large or the ruling classes, especially the corporate world? This is the moot question. Those who opposed the May 21 action are those who, under the guise of advocating people's interests, actually work towards making the government abdicate its social responsibilities towards the people and function only in the interests of the corporate world. 

ANTI-PEOPLE REASONING

The resounding success of the strike has prompted sections of the national press to shamelessly advance such an anti-people reasoning. The Hindu editorially comments (Inconveniencing the Public, May 23, 2003), "whether the trade unions that called for the strike achieve their goals or not, they have succeeded in inconveniencing the public once again."  Which public?  It is the public that went on strike in the interests of the Indian republic!  The inconvenienced are the ruling classes who are looting both the public and the republic. 

The Indian Express in an editorial titled "India Hijacked" (May 22) was more forthright when it stated, "The economic demands of the bank employees, as indeed of other PSU workers, are not warranted, and their political demands are not legitimate.  Why should employees strike work to protest against policies of a duly-elected government in a democracy?  There are better and more democratic ways of protesting against government policy in a democracy than striking work. The economic cost of not working is something India can hardly afford."

Really? What is left unsaid is, however, obvious to all. Can India afford the loot of its public assets in the name of privatisation? Can India afford the human, social and finally the economic cost of reducing the vast majority of its people to a life of penury and deprivation as a result of these economic policies? The right to strike by the workers is a hard earned democratic right guaranteed by the Indian constitution. The working class employs the strike weapon to make the government halt, if not reverse, the policies that are detrimental to the interests of the country and the people. Like Bhagat Singh said when he threw a bomb in the then Central Assembly that this was necessary to make a deaf government hear!

STATE UNDER GLOBALISATION

In any class divided society, the character of the state is always to protect and advance the interests of the ruling classes. The state, itself, is an instrument of such a class rule. Under the present phase of globalisation, however, this inherent character of the state becomes more pronounced.  Even the usual pretenses and disclaimers like "working in the people's interests" or the "country's interests," are abandoned and the state aggressively pushes the agenda for bolstering the profit-making drive of the corporate world. 

The process of privatisation of public assets is a part of this overall aggressiveness.  It is a different matter that Britain, after over a decade of privatisation of its railways, was forced to re-nationalise it recently! The basic objective of privatisation is to place at the disposal of the corporates huge public assets built by people's savings over the decades. 

It has now become a fashion in India to denigrate the public sector. In fact, the advocates of globalisation and the corporate pundits portray the public sector as the biggest blunder of independent India. We continue to hear much about the so-called inefficiency of the public sector. Never once is the present generation told that the bulk of the currently sick public sector units were those that had to be taken over by the state from the private sector, which had turned them sick due to their inefficiency and capricious profit drive. The state, in other words, had to shoulder the burden of the private sector's inefficiency! (This continues even today with the private sector refusing to return loans from nationalised banks amounting to Rs one lakh crore!!) Many of the other sectors like banking, insurance, coal etc were nationalised primarily in the interests of the country and to protect its people from the mercenary swindling of their savings and resources by private capitalists. In other words, part of the public sector emerged in pursuit of protecting the country and its people from the predatory loot of profit by the private sector. Consequently, it emerged to serve the people better!

IT WAS THE URGE OF BOURGEOISIE ITSELF

It is often wrongly believed that the public sector emerged as a part of some socialistic ideas of India's first prime minister, Jawaharlal Nehru, was presumed to have. The concepts of the public sector and state planning were undoubtedly introduced to the world by the first socialist state in the USSR. In India, however, the inspiration and the urge for the public sector, however much many may wish to disbelieve, came from the capitalist class itself.

In the initial years following independence, the monopoly bourgeoisie (which provided leadership to the Indian ruling classes), through the nationalisation of the Imperial Bank and the legal displacement of foreign (mainly British) capital, came to possess the access to both finance and industrial capital. Through state legislation, it virtually cordoned off the Indian market by imposing several tariffs and a long list of import restrictions. Thus, it protected its market and raw materials, vis-a-vis imperialist intentions.

Capitalist development, however, required the creation of an economic infrastructure and facilities of communications --- an investment that the monopoly bourgeoisie itself could not undertake at that stage.  Even if it had the resources, the nature of such investment meant long gestation periods, i e, their capital would be tied up without returning profits for a long period. An option that they were reluctant to undertake. The state, therefore, was to step in to undertake this task. This the state had to do by raising resources, not from the ruling classes, but from the people. The excessive reliance on indirect taxes for raising revenue as opposed to direct taxes,  i e, taxes on commodities as opposed to those on incomes, meant pushing the burden of this method of creation of the infrastructure on to the  shoulders of the poor. The public sector’s role was thus defined. 

The clearest expression of this strategy, in fact, came three years before independence (1944), in a memorandum drawn up by Sir Purushottamdas Thakurdas and seven others including Ghanshyam Das Birla, J R D Tata and Shriram, incorporating a fifteen year plan of economic development. Popularly known as the Bombay Plan, it was a fifteen year plan consisting of three five-year  ones where the first "will lay the foundation for the second and which in its turn will be the basis for the  third one."

The proposals for revenue raising by the government, under these plans, clearly reveal the class nature.  40 per cent  was to come from the savings of the people  collected by the government, and 34 per cent from government borrowing (whose burden eventually falls again on the people). An additional 13 per cent was to come from government  resources (the sterling reserves held by the RBI). In other words, 87 per cent of the resources were to be raised without touching the capitalist class while 45 per cent of the entire plan amount was to be spent to create the industrial infrastructure and an additional 10 per cent for communications so necessary for industrialisation.

Therefore, the decision that the government's business would be to be in business was at the prompting of business itself!

WHY THIS CLAMOUR FOR PRIVATISATION

Over the post-independence decades, the private corporate sector in the country gained immensely from the infrastructure created by the public sector.  Between 1951 and 1990, the assets of the top 22 industrial houses in the country, according to one estimate, grew from Rs 312.63 crore to a whopping Rs 34538.14 crore at a phenomenal annual growth rate of 226.12 per cent. According to another estimate, during the last five decades of the twentieth century, the assets of the 20 industrial houses grew by 500 times!

This enormous capital in their hands (created through the exploitation of the people and by utilising the state) needed to be employed for furthering their profits. In these five decades, the situation has so drastically changed that the very same  capitalist class which, in the initial years of independence, did not have adequate capital to establish such infrastructures  today has capital  that is searching for employment! The clamour for privatisation of the public sector is the result of this. 

This they seek by dishonestly arguing that such privatisation is in the interests of the country and its people. The public assets built through the people's savings and by the people's labour they seek to appropriate for a  song in pursuit of their super-profits.  It is this truth they seek to obfuscate behind the deceitful propaganda that they unleash about the poor performance and mal functioning of the public sector. They lack the elementary honesty, so typical of the corporate world, to tell the truth.

REASONS TO DEFEND   THE PUBLIC SECTOR

However, a further question arises.  If the public sector ultimately resulted in strengthening the private sector by providing the required economic infrastructure, then why this big struggle against privatisation? There are various important reasons why the public sector needs to be defended. The least of all, though important, is the objective of protecting the rights and lives of those employed by the public sector.  The corporate world seeks to reduce the working class struggles against privatisation to this single reason.  There are equal and more important other reasons.

First, the public sector constitutes an economic bulwark of India's self-reliance. For over five decades, the infrastructure created by the public sector helped India to stave off imperialist efforts to reduce us into economic dependency.  It needs to be recollected that in the pursuit of setting up the public sector, prime minister Nehru had first approached the USA and other western developed countries for help in setting up a steel plant. It was only when they refused, by advancing the argument that India could buy all the steel that it wants from their companies instead of producing it herself, that Nehru approached the USSR which readily agreed. This, by itself, explains the fact that the western industrialised countries sought to prohibit India's industrialisation in order to make India crucially dependent upon them.  The public sector, thus, thwarted such designs against India and continues to remain the bulwark of our self-reliance.

Secondly, the public sector industries were located in areas which were economically backward. The public sector, thus, played an important role in creating to an extent economically balanced development in the country.  The tendency of private capital is always to concentrate in those pockets where infrastructural facilities exist to enable them to make greater profits.  Islands of prosperity in vast oceans of backwardness would be a source of constant and serious instability. 

Thirdly, the public sector also performed a social role. It was not only the largest employment provider in the country but also advanced the goal of social  justice  by implementing the constitutionally guaranteed reservations for the scheduled castes and tribes. The private sector currently refuses to do this and would be loath to do so in the future as well.

Most importantly, however, is the fact that the political independence of any country is crucially dependent upon its economic independence. Any erosion of its economic sovereignty will sooner than later impose restrictions and lead to the erosion of its political sovereignty. This process is becoming increasingly clear as this Vajpayee government relentlessly advances the agenda of liberalisation, globalisation and privatisation in India.  Saving the public sector is, thus, vital for safeguarding India's economic independence.

Safeguarding India's economic sovereignty, in turn, is vital to strengthening its political independence and protecting its people from economic enslavement by foreign and domestic capital. Only a government that can do this is able to protect its people. Such protection is the essential pre-requisite that enables any government to serve the people!

MANAGERS AND OWNERS

On the contrary, it is precisely this that this Vajpayee government seeks to do --- the mortgaging of India and the erosion of its economic sovereignty.   This it does because it is a government that instead seeks to serve the interests of foreign and domestic capital. It is a government that does disservice to the people and the country.

That is why crores of Indian workers joined by their brethren from all other walks of life rose unitedly in defence of India on May 21.  This was a clear signal to this Vajpayee government that the policies pursued by it are not in India's interests and not acceptable to its people.

In the final analysis, it must be understood that the public sector, created through people's savings and by people's labour, is the property of the Indian people. The governments that may come and go, only act as the managers of these assets. Now, no manager can sell the property without the permission of the owner. If the manager seeks to do so, then the owner is left with no option but to sack the manager. That is precisely what the Indian people shall do. If this Vajpayee government does not halt and reverse its economic policies in general, and privatisation in particular, then the Indian people, as the owners of the public sector, have to sack this government, who should act as the manager but is bent upon selling these assets without the owner's permission.