ON TO AUGUST 16-31 CAMPAIGN 

On Unabated Loot Of People’s Resources

Sitaram Yechury

Meeting at Kolkata on June 7-9, the CPI(M) Central Committee gave the call for a countrywide protest fortnight from August 16 to 31 in order to focus on the acts of omission and commission being perpetrated by the BJP-led NDA government, to the detriment of our people’s well-being and our self-reliance and economic sovereignty. The Central Committee has already identified the major issues to be focussed by the campaign (these are being reproduced elsewhere in this issue) and the state and lower level committees will be adding their own specific problems to this list. Militant demonstrations, processions and dharnas will be among the major forms of action, to be supplemented by other forms depending on the local conditions.

The article being printed here is part of a series of articles that we are now starting in these columns, in order to highlight the gravity of the problems facing our people and the relevance of the CPI(M)’s said campaign call.    

AS stated earlier in these columns, the BJP-led Vajpayee government seems to be determined to push through its privatisation agenda, amounting to the virtual loot of India's economic resources and demolition of the foundations of our self-reliance. The haste with which the public sector undertakings (PSUs) are being offered on a platter to the private capital is, among other things, guided by the urge to complete the loot at the earliest, lest it is prevented by the growing popular opposition from the Indian people.

The roaring success of the May 21 all-India strike by the working class and the announcement of various nationwide movements against the economic policies of this government seem to have egged on the by-now-infamous disinvestment ministry to rush through the process. Needless to add, this process of privatisation, replete with sleaze and corruption, will rake in much more spoil of office for the BJP and its NDA allies! 

DISINFORMATION? NO, PATENT LIES!

The minister for disinvestment (read disinformation) has announced on July 9 the government’s decision to offload its residual shares in the VSNL, CMC, BALCO, IBP and IPCL. The minister buttressed this decision by a string of disinformation. In an interview to The Indian Express (July 13, 2003), he claimed: "People are seeing that privatisation has improved the performance of companies, be it the increase in production of fertilisers by Paradip Phosphates, expansion of BALCO or increased profits of IPCL.

"Also, the miasma of workers' retrenchment has been proved wrong. In fact, workers in the disinvested companies are doing better than they were, their wages have been revised and all pending dues have been settled. BALCO workers have seen their salaries go up, at Paradip wages are up by 25 per cent while at Modern Food workers are getting Rs 1,800 more every month."

`Disinformation' is a mild term to characterise this minister's statements. These are patent lies.

On May 27, 2003, The Times of India reported that, last year, the prime minister's office had constituted a committee to study the post-privatisation situation in certain privatised units. Among other things, the committee is reported to have undertaken field visits to the Bharat Aluminium Company (BALCO) and Modern Foods. The report said the committee found that the "Sterlite forced VRS on employees and decided to pay the amount in five instalments. Those who refused are being troubled through transfers." So far as the Modern Food is concerned, "It is unbelievable that in just over two years, Hindustan Lever Ltd has cut off staff strength from 1,650 to 850 and is in the process of shifting its Delhi machinery to Jaipur while the Faridabad unit has already been closed." 

GROWING ATTACKS ON WORKERS

Various reports from the trade unions, especially from the Centre of Indian Trade Unions (CITU), inform us that in BALCO, in the name of a voluntary retirement scheme (VRS), compulsory retirement is being forced down the workers’ throats. All facilities available, through decades, are being withdrawn. Medical facilities have practically been stopped. A newly built canteen hall for workers has been converted into an office, simply because the Sterlite feels such a canteen for workers is a luxury. All agreements, conventions and time-tested systems and practices, attained during the public sector period of the BALCO, have been thrown to winds.  In violation of the  terms and conditions of the sale and the court orders, the Sterlite management have retrenched 1400 work-force.

Reports also indicate that the Sterlite group is proposing to merge the BALCO with the Hindustan Zinc Ltd. It was this very government that had handed over the latter PSU too to the Sterlite group, for a song. The IPCL experience also debunks the minister's claims. The Reliance has decided to downsize the manpower --- by 12 per cent, to begin with. 

As far as the Modern Foods is concerned, the company has been referred to the Board of Industrial & Financial Reconstruction (BIFR) merely a year after its privatisation! Clearly, its new owner, the US multinational Unilever (operating through its subsidiary, the Hindustan Lever), is more interested in the real estate properties of Modern Foods than in running the plant. Only the naïve would believe this government's contention that privatisation leads to better economic performance. 

This is even more evident in the case of BALCO. Even after more than two years of its privatisation, there is no modernisation or technological upgradation, as the minister suggests. There is not even an effort to keep the plant running at full capacity. The profitable profile and tube plant has been shut down. This was done to ensure higher profits in other aluminium factories owned by the Sterlite. The quantum of production of aluminium, so crucial for any economy, is now being determined not by what is in the nation’s interest but in the interest of shoring up superprofits for private capital. 

The decision to offload 49 per cent of the current government's stake in BALCO will only compound the complicated situation. For, privatisation ensures only that. Far from strengthening the economic foundations of India's self-reliance, it actually places our people's resources at the mercy of private capital. 

LOOT TO FINANCE GOVT WASTAGE

Often, when we argue that privatisation of profit-making public sector units is akin to a farmer selling his land to meet his daily expenditure, we are confronted with a question from the government side as to why so much of government capital should be locked up in the public sector. In this regard, what is often suggested to us is that if only this amount of capital were released, it could be put to a better use in order to meet the social needs of the people. That this is yet another untruth has been proved through our experience of the last decade. Not one paisa from the proceeds of disinvestment (totalling Rs 26,148 crore between 1991 and 2000) has gone for any social infrastructure development. All of this money has rather gone towards for bridging the government's deficits. In other words, the government is out to finance its wasteful expenditure through an open loot of public assets.

Further, the government investment in the public sector is not a dead loss, as the minister would like us to believe. All profit-making public sector units have been regularly contributing to the government's revenues handsomely --- both in terms of dividend and taxes. Take, for instance, the two oil majors --- BPCL and HPCL --- which both this government is desperately seeking to privatise. The CPI(M) group’s leader in Lok Sabha, Somnath Chatterjee, informs us (speech in Lok Sabha on May 8, 2003) of the following facts: the turnover of the BPCL over the past few years has been Rs 42,294 crore and the excise duty it paid was Rs 10,513 crore.  Similarly, the turnover of the HPCL has been Rs 45,286 crore and the excise duty it paid was Rs 11,246 crore. Thus, the total turnover and total excise duty paid by these two oil PSUs are Rs 87,580 crore and Rs 21,759 crore respectively. And, as against this, what has been the contribution of the private sector? The total turnover of Reliance, Grasim, Bajaj Auto, Tata Steel, Sterlite, Colgate Palmolive, L&T, Raymond and Glaxo for the corresponding period was Rs 88,157 crore (nearly the same as that of the BPCL and HPCL put together) but the total amount of excise duty paid by these companies against this turnover was only Rs 6,840 crore. 

One can well see how this paltry contribution to the government revenues by all these private corporates, put together, compares to the whopping Rs 21,759 crore contributed by just the two said PSUs! And, moreover, this contribution has been growing by the year. In 1991-92, for instance, the BPCL’s contribution to the government’s revenue through taxes was only Rs 1,876 crore. Ten years later, in 2001-02, it contributed as much as Rs 10,513 crore!

HIGH TIME TO KICK OUT THIS REGIME

Thus, in terms of contributions to the government revenues, these blue-chip PSUs that the government is now seeking to privatise, have constantly contributed much, much larger amounts than the private sector did. Moreover, it is also certain that what the government may earn through such privatisation would only be a small fraction of the contributions these PSUs would make in the long run. 

To reiterate, privatising the profit-making public sector is, thus, similar to that of a farmer selling his productive asset --- land --- to meet his daily expenditure. The future that would stare in such a farmer’s face is sure-shot ruination in a few years. 

Such ruination is the future facing the Indian people as well, if this mercenary loot of our people's assets is allowed to continue. Thus, for the sake of India, i e, Bharat, these policies have to be halted and reversed. But this is possible only when this Vajpayee government is removed from office. 

The forthcoming all-India people's movement, to be conducted by the CPI(M) from August 16 to 31, aims at focussing on this very urgent task before the Indian people.