BHEL DISINVESTMENT

Left Stand Has No Hidden Motives

Prakash Karat

THE Left parties are of the view that the UPA government’s decision to disinvest 10 per cent shares of the Bharat Heavy Electricals Ltd. (BHEL) goes against the provision in the Common Minimum Programme which states: “The UPA will retain existing navaratna companies in the public sector while these companies raise resources from the capital market”. This specific provision regarding the navaratnas was included so that it is not confused with other public sector enterprises. The CMP also states that “generally profit-making companies will not be privatised.” Further the CMP states that “Public sector companies and nationalised banks will be encouraged to enter the capital market to raise resources and offer new investment avenues to retail investors.”

Nowhere is it stated that the government can disinvest shares of the PSUs and realise the proceeds for its budgetary requirements. There is a separate reference to sick public sector companies and chronically loss making ones and the measures to be taken to tackle the problem.

It is around these formulations of the CMP that differences have arisen between the UPA government and the Left parties. The Left parties cannot accept the argument that with the government retaining 51 per cent shares, in an enterprise, the public sector character will be protected. By selling off 49 per cent shares the government would be taking the public sector enterprises to the brink whereby in future a two per cent sale would transform it into a private enterprise.

CREEPING PRIVATISATION

Further, the idea that disinvestment does not mean privatisation has been exploded by the experience of the past one and a half decades. Successive governments have sold off shares of PSUs and used the money for their budgetary requirements leading to the outright privatisation of some. Weakening of the best public sector units is a form of creeping privatisation. Further, it does not make economic sense as the dilution of the government share leads to a loss of revenue for the government in the form of reduced dividends.

The BHEL sell-off was to be the first in a series planned by the finance ministry so that Rs 10,000 crore can be realised in the current financial year. It is because other navaratna companies and profitable public sector units were to be disinvested after the BHEL sale, that the Left parties decided that it cannot accept this gross violation of the CMP.

The decision of the Left parties to suspend participation in the UPA-Left coordination committee has been received with a barrage of criticism and attacks by the predominantly right-wing media in the country. The Indian Express, The Times of India and the big business financial newspapers, have caricatured the Left position. Political motives have been attributed which cannot stand the test of reason.

FALSE CHARGES

Take the common allegation that the CPI(M) and the Left parties have behaved in this manner because they have an eye on the assembly elections in West Bengal and Kerala early next year. The argument goes as follows: the CPI(M) and the Left have to show that they are fighting the UPA government in order to prove to their followers and the electorate that they are not accepting the UPA government’s policies. Underlying this charge is the reasoning that the Left parties have no real problem with disinvestment but they are adopting such a political stance to mollify their support base and rally the forces against the Congress in West Bengal and Kerala. Much is made of the fact that the CPI(M) and the Congress will be fighting each other in the assembly elections in these two states, and that is determining the all India stance of the CPI(M) and the Left parties.

A dispassionate examination of the experience of the one year since the UPA government came into office and the political situation in these two states will make it clear such reasoning is baseless and meant to denigrate the Left.

In the one-year since the UPA government took office, the CPI(M) and the Left have steadily expanded their influence and electoral strength in the states of West Bengal, Kerala and Tripura. One has only to look at the results of the various by-elections to the state assemblies and the municipal and local body elections. The trend is clear. The big victories achieved in the three states in the Lok Sabha elections are being carried forward. In Tripura, the Tripura Tribal Autonomous District Council elections were held in March 2005. For the first time, the Left Front won all 28 seats in the council. The Congress, the Trinamul Congress, the TUJS and other parties failed to win a single seat.

In West Bengal, elections to 80 municipalities and the Kolkata Corporation and Bidhannagar Corporation elections were held in the month of May-June. The Left Front could win 58 of the 82 municipalities, retain the Bidhannagar Corporation and wrest back the Kolkata Municipal Corporation from the combined forces of the Trinamul Congress, Congress and the BJP. In the assembly by-elections held during this period, the Left Front could win all of them.

In Kerala, two assembly by-elections were held in Kannur district in June. The results were an unprecedented victory for the CPI(M) candidates. In Kuthuparamba seat the margin registered has been the highest ever in an assembly seat in Kerala. The by-elections to local bodies have also shown a strong trend in favour of the LDF.

Just as in the Lok Sabha elections of 2004, so also in the elections in this one year period, the CPI(M) has been taking its political line to the people –– the necessity to isolate the communal forces, the call to defeat the Congress whose policies are not in the interests of the people and to ensure that the CPI(M) and the Left emerge victorious. While doing so, the CPI(M) has been explaining why we decided to support a secular government at the centre even though it is led by the Congress party. Our Party in West Bengal, Kerala and Tripura has faced no difficulty in explaining to the politically conscious people of these three states our line of extending support to the UPA government to help the process of isolation of the communal forces while putting up a fight against the class dictated economic policies of the same government. Our experience is that this line has found wide appreciation among the people which is manifested in the growing support for the Party and the Left.

The CPI(M) does not decide its all India line and policies based on the position in one or two states. That is why we are not a regional party but a party with an all India approach and a national line.

The time when the differences erupted on the disinvestment of navaratna companies was not determined by the Left parties. The issue began with the government’s announcement in the union budget to go in for disinvestment. Even earlier when such moves were reported in the media in October 2004, the Left parties had voiced their protest. Unlike other issues where there are differences, the disinvestment of a navaratna company is in direct violation of a specific commitment in the CMP. That is what has occasioned the suspension of participation in the coordination committee and not some nebulous and fanciful idea that CPI(M) and the Left stand to gain with this posture in the assembly elections to be held next year.

PARTY’S STAND ON PUBLIC SECTOR

Another type of attack launched in the media is that the Left and the CPI(M) in particular adopt double standards. What is opposed by the CPI(M) at the centre is implemented by the West Bengal state government headed by the CPI(M) chief minister. As The Indian Express and The Times of India put it, the CPI(M) opposes BHEL disinvestment while selling off its share in the Great Eastern Hotel in Kolkata. The Indian Express has editorialised about “The Great Eastern Way” and advised the CPI(M) to follow this enlightened path at the national level. To compare the BHEL, a world class company producing electrical and infrastructure equipment with a reserve fund of Rs 5000 crore with a decrepit hotel which was taken over by the state government in 1971 as a sick private establishment is not only ludicrous but also shows a clouding of judgement due to neo-liberal blinkers.

WEST BENGAL POSITION

The CPI(M) is of the clear view that protecting the public sector from the onslaught of neo-liberal policies and privatisation requires streamlining the public sector and prioritising the use of resources. The West Bengal state government will not privatise any public sector undertaking in core or strategic area. Nor will it divest and privatise any of the profitable state undertakings. Certain enterprises which fulfill an essential social purpose will be retained even if they are not profit making. The Great Eastern Hotel does not fall in any of these categories. The West Bengal government should not utilise its scarce resources to modernise and upgrade this hotel into a five star property. Such resources should be used for more essential purposes. The decision to sell off the Great Eastern Hotel was taken years before when Jyoti Basu was the chief minister. It has taken a long time to do so because unlike the other state governments, the Left Front government has worked to see that the workers are taken into confidence and the trade unions agree to a package of compensation, rehabilitation and relocation of the workforce.

It is a similar approach which is governing the state government’s policy on restructuring of the public sector undertakings. The pilot project for the restructuring of 18 loss making enterprises including the Great Eastern Hotel is now being completed.

Unlike what the bourgeois media and the ruling circles at the centre propagate, it was the Polit Bureau of the CPI(M) which discussed the proposal for restructuring  put up by the West Bengal state committee of the Party and gave its approval in the year 2002. The UPA government is not going about reforming the public sector in this manner. It is selecting the enterprises in the core and strategic sectors and those which are the most profitable for successive rounds of disinvestment. It has not formulated a coherent policy to deal with the loss-making units, many of whom are potentially viable. A Board for Restructuring of Public Sector Enterprises has been set up which can go case by case into such enterprises and come up with recommendations for the government to act upon. The Left parties would however insist that no disposal of public sector units either to the private sector or in the form of closure should take place without ensuring the protection of workers interests. In the case of closure a full package of compensation, rehabilitation, retraining and relocation should be provided.

The 18th congress of the CPI(M) has framed the approach of the Party to the public sector in its document “On Certain Policy Matters”. The critics of the CPI(M) would do well to study this document which explains our approach.

STAND ON PETROLEUM PRICES

The anxiety to portray the CPI(M) and the Left in a bad light has also been seen in this period in the way a section of the media has sought to highlight our opposition to the increase in the prices of petrol and diesel. From April onwards, the CPI(M) and the Left parties have been giving concrete proposals to the government on how to avoid imposing fresh burdens on the people through price hikes of petroleum products. When it became clear that the government was contemplating a steep increase in prices, the Left parties submitted a five-point proposal to the government. These proposals were made available to the media and the public too. When it became evident that the government would go ahead with the price hike after a meeting with the prime minister, the Left parties announced their decision to go for a countrywide protest the moment the price hike was announced. When this announcement was made on June 20, the Left parties announced their protest action for the 28th of June.

In order to blunt the opposition of the Left parties, a canard was spread that the CPI(M) leadership had approached the government to postpone the price hike till the Kolkata Corporation elections were held on June 19. This was allegedly done because the CPI(M) was afraid of the fall out of the price hike on its prospects in the elections. Nothing can be further from the truth. From May itself, the CPI(M) had begun its campaign amongst the people warning them of an impending price hike. For instance, the Polit Bureau in its meeting held on May 14-15 had declared that after three successive price increase in one year, if the UPA government proceeded with another hike, this would be met with strong resistance by the people. As far as the Kolkata Corporation elections are concerned, if the price hike had been announced before the elections, the only impact it would have had was to reduce the number of seats that the Congress got. From its tally of 15 seats it might have gone down by a couple of more seats! The people of Kolkata know very well who have been fighting against the price hike and they would have punished the party which had imposed such a burden on the people.

The people’s response all over the country to the June 28 call of the Left parties against the hike in petrol and diesel prices has been good. In West Bengal and Kerala popular protest have been widespread and strong. The CPI(M) and the Left parties do not need to resort to clandestine maneouvres. The people know that in matters where the government goes against people’s interests we will be with the people.