Modi govt’s privatisation drive will undo nation-building measures taken over seven decades

Finance Minister had earlier announced that except four major units in the strategic sector, all other state owned firms in the other segments would eventually be privatised

IANS Photo (Representative Image)
IANS Photo (Representative Image)
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Krishna Jha

After the first general elections held in the country in 1952, the Communist Party of India emerged as the main opposition party. It was the task of nation building that faced both the opposition and the Congress that had formed the government. Both together decided to follow the Constitution and opted for a democratic system.

With a composite culture, preserving unity in diversity, socialism and secularism, the state apparatus was formed. Constitution was already framed, adopted and put to practice that promised equality, liberty and fundamental rights to all. The right to vote was for all adults, irrespective of their community, caste, language, gender and region. They were also equal in law. Experts were consulted for a blue print to revive economy. Five year plans were prepared.

Steps were taken to have an infrastructure to build democratic superstructure based on self-reliance. The infrastructure was to provide heavy machinery to build transport facilities, dams, bridges, mines, communication, electricity, and power. The sources of energy like oil and coal were also discovered. The refineries and processing units came up. The heavy industries were set up to construct railways, their wagons and engines, and other heavy vehicles. Scientific studies, research and experiments were promoted. Attention was paid to develop of human knowledge, and for that universities and colleges, as well as schools were opened.

The task was huge and to meet the challenge of nation building, preparations began, for which the expenses were on the state. Each and every citizen of the country was a participant, and hence a share of economy was centralised in the public sector, which was to acquire ‘the Commanding Heights’.

The entire economy was perceived as a combination of public and private initiatives. Banking and financial sector were developed. Banks, electricity, railways, tea gardens, textile, mining, oil and many others were nationalised. Employment was generated as the public sector as well as medium, small and micro enterprises were given help to evolve. Along with dams, irrigation system was developed.

With public sector in the country, the issues of generating income for people was resolved to a great extent. The share of public sector in net domestic product (NDP) has gone up from 7.5 per cent in 1950-51 to 21.7 per cent in 2003-04. Again, the share of public sector enterprises only (excluding public administration and defence) in NDP also increased from 3.5 per cent in 1950-51 to 11.12 per cent in 2005-06.

There is a significant role played by the public sector in the gross domestic capital formation of the country in which its share has gone up from 3.5 per cent during the First Plan to 9.2 per cent during the Eighth Plan. The comparative shares of public sector in the gross capital formation of the country also recorded a change from 33.67 per cent during the First Plan to 50 per cent during the Sixth Plan.


The issue of employment was also resolved to a great extent. It was available in administration, defence and other government services. In the economic enterprises too, Centre, state and local bodies offered jobs. In 1971, public sector offered jobs to eleven million people.

It has been always public sector that provided infrastructural facilities, like power, transportation, communication, basic and heavy industries, irrigation, education and technical skills. With all this cooperation, both agrarian and industrial development moved fast. It helped the private sector as well. Thus the country moved on through the mixed economy of capitalist democratic path, with setting an example of both unity and struggle. With every initiative towards self reliance, political and ideological struggle took place.

Now, the days have come when production and investment are pushed to the back stage. The government is keen to privatise the public sector units, and new ‘reforms’ are introduced. Finance Minister had earlier announced that except four major units in the strategic sector, all other state owned firms in the other segments would eventually be privatised, adding that this would be part of a new coherent public sector enterprises policy to be formulated to push ‘reforms’ to central public sector also.

The government has come out with more ‘initiatives’ towards its privatisation drive saying that all non-strategic public sector units would be sold as and when it could be done. Obviously it is not lack of intent that holds them back. In the words of one of the economic advisors for the government, “...The Essential Commodities Act was considered as holiest of the holy law like the ten Commandments, but the government has now done away with that too...”

A six and half decade old law was ended to deregulate food items, even the basics like rice and pulses. Labour laws are now restrained to only four codes. Farmers are on a dharna at the borders of the capital against the three acts imposed on them that shows complete lack of concern for the suffering masses.

To initiate the process of privatizing Vizag steel unit was one such ‘initiative’ that is to end the concept of self reliance, and interrupt the process of building up of infrastructure. The unit was established after 32 young people, most of them members of All India Youth Federation, sacrificed their lives. The workers in the unit, when it started functioning, had found such ways to agitate that never interrupted the production.

One of the finest examples of nation building has been crushed by the greed for finance capital.

(IPA Service)

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