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Save Public Sector, Save Farmers, Save India Day

Thomas Franco
   Friday 19 May, 2017  

May Day is celebrated as International Workers Day to remember the sacrifices of the working class and also assert the rights of workers.  The first May Day was on May 1, 1886 when more than 300000 workers in 13000 businesses across the United States walked off their jobs asking for an 8 hour day among other demands.

May Day is the phrase used when making a distress call via radio in case of any emergency. Since the Trade Unions in India feel that we are in an emergency they have chosen to call May Day the "Save Public Sector, Save Farmers, Save India Day” at the initiative of All India Bank Officers Confederation.

Public sector units, many of which were called the modern temples of India by Pandit Jawaharlal Nehru are under attack for the wrong reasons.  Look at the past.  In 1994, the Bombay Plan pave the way for the Public Sector.  It was prepared by industrialists like JRD Tata, G.D. Birla, Ardeshir Dalai, Shriram, Kasturbhai Lalbhai, Sir Purshottamdas Takurdas and John Mathai. The plan envisaged that for the development of this country after Independence, we required a public sector; we require the government to intervene in the core sector, banking, infrastructure etc where huge investments were needed.  The private sector only wanted to enter sectors where they could make quick money.  Now the heirs of these industrialists want the benefits of ownership of the public sector. Today the Prime Minister says the government has no business to be in business, echoing the Chicago School of thought.

The Public Sector has contributed a lot to the growth of the country’s economy.  It is the duty of the government to provide it’s citizens goods and services.  For this it created departmental enterprises and corporations.  Today the Indian Postal System delivers letters at the cheapest cost. The Indian Railways transports 2 crore passengers everyday at the low cost.  The moment BSNL entered mobile services the call charges dramatically came down.  Indian Public Sector Banks serve in the most difficult areas in J&K, the North East, Andamans and Chattisgarh.  There were 320 Public Sector Enterprises in the country with a paid up capital of Rs.228334 Cr as on 31.03.2016 and they provided a dividend of Rs.70954 Cr in 2015-16.  The return is 31 per cent.  Look at some interesting statistics for 2015-16.  Total Turnover/revenue from operation was Rs.1854667 Cr.  Profit earned was Rs.144523 Cr.  Loss incurred by PSEs was Rs.28756 Cr.  Net Profit of all 244 CPSES was Rs.115767 Cr.  Contribution in the form of duties and taxes was Rs.278075 Cr.  The number employed totalled 12.34 Lakh people.

The market capitalisation of 46 CPSEs itself is Rs.1106766 Cr.  Why should the Government disinvest these enterprises? Those who are buying are buying only to earn profits..  If that profit accrues to the government, it can be used for the people of the country.

Banks were nationalised as under private ownership they were not providing services to the majority.  The objective was to serve the people and not profit alone.  The Banks have done excellently well.  As per SBI Ecoflash, during the period 2006 to 2017, the Banks have received a capital of Rs.1.29 Lakh crores whereas they paid dividend of around Rs.75000 crores and taxes of around Rs.1.50 lakh crores.i.e.2.25 lakh crores against infusion of Rs.1.29 lakh crores.  Is that not a good return? We keep comparing ourself with other countries.  China had injected $127 billion between 2004-2007.  US injected $ 2.27 trillion after the 2008 crisis.  India injected $17 billion only.  The deposits, advances and gross profit of all PSBs are steadily increasing but the government calls them weak.  Weakness is only on account of the NPA created by loan defaults of a few corporates for which the RBI and government are equally responsible along with the top executives of the Bank.  No action has been taken against them but we plan to sell these Banks to the same culprits.

The Public Sector is constrained by the policies of the government.  The policies after the 1991 Liberalisation has led to a few corporates cornering a large portion of the loans and defaulting.  Small borrowers are neglected.  Farmers are neglected. Now after opening 27 Crore Jan Dhan accounts, after handling demonetisation for which no compensation has been paid,  the RBI and Govt are talking about privatisation.  A circular sent to the banks by an official of the Finance Ministry has instructed banks to go for capital mobilised from the market. The RBI Governor is talking about merger and privatisation.  This is after getting huge return in terms of Profit (Dividend), Taxes and Services.

Farmers in the country want minimum support prices to meet the cost of production, they require processing centres, they require small credits which they are not able to get forcing them to go to money lenders.  They give us our food.  Without them, the country cannot ensure food security. But we are not doing enough for them.  The priority sector lending norms have been so diluted in the last 25 years leading to neglect of the real farmers. The absence of improvements in irrigation, preservation and processing and the low Minimum Support Prices (MSP) offered is killing them.  We have to come to their rescue.

So time has come to "Save Public sector, Save Indian Farmers and Save our country".

* Thomas Franco




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