People's Democracy

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


No. 22

June 03, 2007



Subhas Ray


THE budget session of parliament concluded on May 17, much before the scheduled May 22, with the role of the BJP and allies has facilitating the ruling Congress and its allies to get some important bills passed in haste. As many as three bills --- the Constitution (Scheduled Castes) Order (Amendment) Bill 2006, Security Contracts (Regulation) Amendment Bill 2007 and the National Institutes of Technology Bill --- were passed in a din, within 15 minutes, followed by Lok Sabha’s adjournment for the day. Discussions on many ministries’ demands for grants were simply guillotined in the name of time constraint.




Joining the Lok Sabha discussion on price rise, the CPI(M)’s Samik Lahiri sharply held the government’s liberalisation policy as the culprit for the unabated rise in the prices of all essential commodities. He said there were three factors leading to the sharp price rises --- mismanagement of the food economy, a sharp rise in the petrol and diesel prices, and the futures trading in agricultural commodities, introduced by the earlier NDA government. On the other hand, the public distribution system (PDS) has been dismantled.


Lahiri charged that the government’s figures on prices are hiding more than what they reveal. It is busy manipulating the price indices. The prices of food articles are on the increase and the poor cannot afford open market prices. Yet, food subsidy was brought down to Rs 25,696.2 crore in the 2007-08 budget from Rs 26,200 crore in the 2006-07 budget. The government claims a growth of 8.7 percent but it is only 2 percent in agriculture --- less than population growth. If this state of affairs continues, our country will inevitably face a food shortage, Lahiri warned. Saying that effective steps are a must to control the price rise, he demanded strict action against the hoarders and black marketers who are out to take advantage of this situation.




Both the houses of parliament have passed the State Bank of India (Subsidiary Banks Laws) Amendment Bill 2007. During the discussion, the CPI(M)’s Amitava Nandy in Lok Sabha and Tapan Kumar Sen in Rajya Sabha strongly opposed the dilution of SBI’s and government’s holdings in the subsidiary banks. Opposing the objects and reasons of the bill, Nandy said the government had not considered the note of dissent made at the standing committee meeting. The provisions of the amendment bill were of a far-reaching nature but were not properly considered. The bill proposed to restrict the SBI shareholding in subsidiary banks to 51 percent, thus giving an opportunity to the big shareholders to influence the policies of the subsidiary banks. Further, it proposed to raise the cap on voting rights of the shareholders. Nandy insisted that the finance ministry withdraw the present bill and prepare a new bill to increase the authorised capital of the subsidiary banks to the level of Rs 100 crore and also to enable the SBI as a holding company to nominate the board chairman of a subsidiary bank.


Tapan Sen charged the government with initiating a process of disinvestment through a dilution of the SBI or government holdings in the subsidiary banks. Sen insisted that the minister accept his amendments to the bill. Pointing to the regular decline in priority sector lending, he said some Rs 2 lakh crore reserves had piled up in these banks but yet agriculture, small-scale industries etc were not getting loans. Nay, they have to pay higher rates of interest even if they get loans. In fact the Basel I and Basel II norms compel the banks to ignore these sectors. But these norms are doing a disservice to India, a developing country. The banking system in India cannot be an institution for commercial lending only; it is an important instrument of all-round growth. That is why it is expected to do something more and, Sen reminded, it was nationalised in 1969 with precisely that kind of perception. The Basel norms concern the presence in international banking business but the SBI’s presence there is hardly 6/7 percent which, according to the RBI, must be at least 20 percent; Basel II applies only in that situation. Sen asked the finance minister to review this aspect also.




The parliament has passed the Electricity (Amendment) Bill 2007, with Rajya Sabha endorsing it on May 16. During the debate, Tapan Sen, CPI(M), lambasted some aspects of the bill, like not honouring the NCMP commitment of reviewing the Electricity Act 2003. There was no proper, objective consideration about how to give a right direction to the power development in the country.


The provision made regarding captive generation is going to create a serious problem, Sen warned, as the private power producers will create a serious problem for the regulator. He urged the minister to review and revise this provision.


Sen also demanded that the ministry redefine theft as the amendment includes unauthorised usage of power in theft. The areas of cooperation, the tasks involved, the authority etc must also be clearly defined to evade a conflict of interests, he suggested.



The Rajiv Gandhi Vidyutikaran Yojana provides for 90 percent capital subsidy for rural electrification but, unfortunately, it has been tied up with the conditionality of introducing a franchise system. But most of the state governments are opposed to this concept, Sen reminded. The state level power utilities must be allowed to decide how to distribute power, collect revenue and administer other things; that would be in the real spirit of cooperation. He therefore insisted that franchise must not remain a conditionality in the Rajiv Gandhi Vidyutikaran Yojana.


Regarding the ambitious programme of five planned ultra-mega power projects of 8000 MW; Sen said the NTPC management must be pulled up for having quoted a higher price for power production and thus allowing private operators to have a cakewalk in these projects. He also opposed the elimination of cross subsidy and emphasised the need of its continuation.




Lok Sabha passed the Warehousing (Development and Regulation) Bill 2005 on May 15. From the CPI(M) side, P Satheedevi said 50,000 tonnes is the prescribed stock limit for the warehouses run by private parties as per the notification of the government of India. If proper monitoring is not there, she warned that there are chances that these warehouses are used for hoarding purposes, more so as unscrupulous elements are engaging in rampant speculations in futures trading. So there must be specific provision in the bill to save the warehouses from misuse. The government has also to ensure that the value of a receipt in no way falls below the government’s minimum support price. Specific steps must be there to prevent hoarding.


As agriculture is a state subject, the policy decisions taken by the central government may badly affect the rights of the states and, at the same time, open the way for privatisation of governmental warehouses. The standing committee has suggested that the union government must frame a model act and its implementation must be left to the state governments. This demands that the state governments are also consulted, she said. If the bill is passed in its present form, it would be usurping the powers and rights of the state governments. There must be some state based advisory councils, consisting of nominees of state governments, and it must be mandatory to consult these councils so as to protect the rights of state governments, the member demanded.




Parliament has passed the Central Road Fund (Amendment) Bill 2007, with its adoption by Rajya Sabha. Supporting the bill, the CPI(M)’s Moinul Hassan said this is a project to build up infrastructure in the country, one for the development of rural roads. Building rural roads is important for fostering economic activities in an area. But due to lack of proper maintenance, roads in a particular area deteriorate in one year or two. It is just a drain on the national exchequer and wastage of national property. There must be proper maintenance of roads for the benefit of the rural people who have been suffering since independence.


Hassan also raised the issue of fund required for maintenance of national highways, building a new national highway or building a new state highway. So the amendment bill must incorporate a clause regarding the maintenance of national highways whose condition is pathetic.


In West Bengal, for example, the condition of National Highway 44 needs an improvement since many accidents take place along it; external affairs minister Pranab Mukherjee also met an accident there. Widening and maintenance of various national highways in West Bengal, such as NH-34, 55, 31 and 31A which are in a very bad shape, must be done immediately.


Suman Pathak, CPI(M), made a special mention demanding repair and maintenance of the National Highways 55, 31 and 31A. He said the NH 55 connects the Darjeeling hill area to the rest of the country. Darjeeling is famous for tourism and tea industry. But it is unfortunate that the condition of such an important national highway is pitiable and left uncared for long. He urged the government to make it a two-lane highway and take care of its maintenance in view of the increasing number of tourists visiting Darjeeling.


The condition of NH 31 and 31A is also pitiable. These highways connect the North East Sikkim and pass along the Teesta river. Often the vehicles passing over this river fall into it. Many accidents are taking place there. Rafting is necessary in order to rescue the drowning alive or fish out dead bodies. The government must come forward to form rafting groups, give them proper training, and give all facilities for rafting as a sport. The NH 31A got damaged due to an NHPC project. So the NHPC must be instructed that the work of this project must be undertaken without damaging the said highway.


In Rajya Sabha, Moinul Hassan spoke on sale of spurious drugs in the country. He said nearly 30 percent of the medicines sold in the country are spurious. The trade in such drugs is worth a staggering Rs 4000 crore. Delhi has earned a dubious distinction in this regard and downtown markets in New Delhi are the major hubs of this trade. But the government is helpless before the onslaught of spurious drugs, and authorities are turning a blind eye to this racket. Pubic health system is in a shambles. There is no proper study of what the drug inspectors are doing and how many inspectors are needed. India’s reputation as a haven for spurious drugs and as an exporter of substandard medicines will adversely affect the growth of our pharma sector. He urged the government to weed out the fake drug manufacturing units, increase the number of drug testing units and use media to alert the people. He also demanded exemplary punishment to the culprits.