People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXX

No. 29

July 16, 2006

NALCO-NLC: Success In The Struggle 

And The Way Forward  


Prakash Karat  


THE decision of the UPA government not to proceed with the disinvestment of shares in Neyveli Lignite Corporation (NLC) and the National Aluminum Company (Nalco) is a significant victory for all those who defend the existence of a strong public sector and who are opposed to the neo-liberal policies of curtailing the public sector.   


When the disinvestment decision was announced by the union cabinet, the workers and staff of the two enterprises decided to launch a determined struggle to stop the disinvestment. The Nalco employees immediately struck work at the Angul plant. This was followed by the decision of the Nalco unions and seven trade unions calling for a general strike on June 30, which was very successful. The strike was supported by all the political parties in Orissa, except the Congress. Ironically, in 2002, when the BJP-led government sought to sell shares of Nalco, all the political parties except the BJP joined the protest movement. The experience of the Vajpayee government in its failed attempt to sell Nalco should have cautioned the Manmohan Singh government not to attempt a similar step. Elementary political sense would have shown that the people of Orissa will not tolerate the weakening of the public ownership of Nalco, which is seen as one of the few well-run enterprises of the state. But the fact that the government insisted on this folly speaks volumes about the ideological commitment of the decision-makers to neo-liberalism and their divorce from popular sentiments.   


The CPI(M) and the Left parties had decided that the Nalco and NLC disinvestment must be fought relying on the struggle of the workers of the two enterprises. Every effort must be made to intensify the struggle and widen it so that all the forces against privatisation can be rallied. The indefinite strike in Neyveli and the proposed widening of the protest actions in Orissa on Nalco would have set the stage for a major struggle against the government’s approach to the public sector with regard to privatisation and disinvestment.  


The Nalco disinvestment would have run into greater resistance not just from the trade unions but from the people of Orissa whose feelings would have compelled all the political parties to line up against the decision. If the government had not called off the disinvestment, the powerful protest movement planned by the Left and other political parties would have shut down Orissa for forty-eight hours. In the case of the Neyveli Lignite Corporation, nearly 19,000 workers and staff went on an indefinite strike from July 4. The NLC does lignite mining and generation of power. The 2490 MW power plant was left producing only 50 MW to maintain certain essential services. The strike was conducted by a joint council of the unions. It is this united and powerful protest of the workers which led chief minister Karunanidhi and the DMK government to ask the central government to withdraw the disinvestment decision. Three days into the strike, the DMK decided that it would withdraw its ministers from the cabinet and support the government from outside if the decision was not reversed. The central government was left with no other option but to suspend the disinvestment process.  


The episode has an important lesson. On the attitude to the profit-making public sector units, the government and the people are on different tracks. Unlike earlier years when disinvestment of public sector units would evoke protests only from the trade unions and the Left parties, the defence of the public sector particularly the profit-making units, has now popular support and constitutes a wider political platform. The fact that there is a UPA government at the centre which has committed in the Common Minimum Programme not to privatise profit-making public sector units is itself an indication of how the people view the earlier harmful practice of outright privatisation and dismantling of the public sector.  


One has only to recall the notorious privatisation of Balco which was undertaken by the Vajpayee government in 2002. The 67-day prolonged strike of the Balco workers did not succeed in stopping the privatisation. Firstly, there was the rightwing BJP-led government which was determined to push through the privatisation under the stewardship of the minister for disinvestment, Arun Shourie. Secondly, the Ajit Jogi government in Chattisgarh betrayed the workers after initially supporting the struggle. There was also the lack of wide political support for the workers movement. The situation has changed since then. Privatisation and disinvestment in profitable public sector units are unacceptable and public opinion will go against the government and parties which sponsor such moves. The Congress party both in Orissa and Tamilnadu would have learnt this lesson fully in the Nalco and NLC episode. Whether the central government has absorbed the same lesson remains to be seen.  


The decision to disinvest in Nalco and NLC is not an isolated act. It is part of the overall approach of the UPA government which is reflected in the economic policy direction and the firm belief that the economic reforms initiated in 1991 and continued with vigour by the BJP-led government needs no review or course correction. Over the two years of the UPA government, the trend of going ahead ignoring the adverse consequences of the policies of liberalisation and privatisation and not heeding the people’s concerns, is becoming more pronounced. It is in this context that the Left parties submitted a comprehensive note to the government and the Congress leadership in June. The note sets out the areas of concern of the Left parties, the differences in key areas and what should be the way forward.   


Apart from the overall direction of economic policies, the failure to address the immediate problems of the people such as price rise, curtailment of the public distribution system and suicides by farmers are also of concern. The refusal to reconsider forward trading in foodgrains, pulses and other essential commodities and the continuing quest to cut food subsidy and curtail the public distribution system, display the same outlook which considers disinvestment of shares in profitable PSUs as one of the main avenues for resource mobilisation. In this connection, it is important to note that the UPA government did not accept any of the proposals on resource mobilisation made by the Left parties to the UPA-Left Coordination Committee in December 2005.  


The pro-US orientation in foreign policy and the implications of being bound down to US strategic interests through the nuclear cooperation deal have been another major concern for the Left. The various conditionalities being attached to the legislation to be approved by the US Congress have raised a host of apprehensions.  


All these questions are dealt with in the note submitted by the Left parties to the UPA-Left Coordination Committee. The CPI(M) and the Left parties will consider the response of the government to this note while deciding what course of action should be taken.   


In the meantime, the central committee of the CPI(M) has decided in its June meeting in Hyderabad to conduct a big national political campaign. The campaign will set out the Party’s stand on the need for a change in economic policies focussed on meeting the needs of the common people. It will point out the danger of a strategic alliance with the United States and the need for an independent foreign policy. It will also expose and condemn the BJP’s communal Hindutva agenda and call for firm steps to check terrorist violence. At the same time, the Party has called for taking up the immediate issues of price rise, food, employment, land and defence of the interests of the working class for launching local struggles and for the mass organisations to conduct united movements.