Have NRI Pampering and Privatisation made 'India Shining'?
Privatisation has its origins in 1990s globalisation initiative of PV Narasimha Rao's minority government. In the fast-track Industrial and Fiscal reforms that ensued, liberalisation has been given utmost priority in all spheres of governance and economy in order to install private sector in a big way, pushing public sector priorities aside.
Though globalisation has been justified as a necessity in the face of global economic meltdown, its implementation strategies and intentions have become questionable in many ways , as is evident from what has been happening in the country since then. In reality, globalisation has largely served interests of the elite and their businesses in India and abroad in the private sector rather than contributing to the nation's economy and well being of its people at large. This article briefly discusses how globalisation (liberalisation cum privatisation) through NRI route, has brought about change in the Indian economy.
India Shining, a whooping drain on Exchequer:
Privatisation has taken wings during Atal Behari Vajpayee's NDA government, and is being pursued in succession by Manmohan Singh's UPA governments, as a blessing in disguise. Intense parleys to appropriate national wealth in several forms of privatisation have been initiated during 2000s. It was in 2003 the India Shining campaign was conceived as a marketing tool in the guise of projecting India internationally to attract Non-resident Indians'(NRIs) investment to face globalisation challenges. An estimated 20 million US$ (around Rs. 80,00,00,000 crores on average at that time) was supposed to have been spent on advertising in print and electronic media during the 2004 general elections by the NDA government. Besides the euphoric optimism it has created, there has been negative criticism about its utility in the national interest. In the words of LK Advani after the elections, the campaign was 'inappropriate'.
Everything offered for free on a platter:
Any NRI could just set foot anywhere in India and create assets using the already well developed industrial infrastructure in whichever manner they wanted. Huge amounts of funds from Indian exchequer and from world bank have been made available for creating additional infrastructure like national highway connectivity and for Special Economic Zones (SEZs) by acquiring large tracts of agricultural and government lands, displacing the small farmers and the slumdwellers. A slew of concessions: interest-free capital, liberalisation of Import-Export norms, free power supply, tariff relaxations etc have also been introduced to NRIs' advantage. Similar gestures have not been extended to PSEs and to businesses of resident Indians operating in micro, small and medium scale industries in the private sector.
Indian Diaspora discovered to channelise ill-gotten wealth:
The India Shining campaign has been orchestrated by the Confederation of Indian Industries (CII) and the vested interests in the political, governmental and bureaucratic set ups. It has paved ways and means to enable NRIs and the Indian elite swindle the accumulated wealth in public institutions that included Provident Fund, Pension and Insurance, Public Sector Enterprises and Banks (PSEs and PSBs), hospitality and service sectors besides the nationwide infrastructure that has been created in air and surface transport, Public Distribution System and communication (P&T) sectors since independence. A nexus has been created between politicians, corporate houses, bureaucrats and select media houses on one hand and NRIs on the other to facilitate laundering activities both within and outside India. In order to siphon off the plundered wealth into Swiss Banks and for investments abroad , parties to this nexus have discovered a safe route called Indian Diaspora, covering all sorts of NRIs spanning all over the world . The PR outfits and the media houses, that have sprung up as by-products of privatisation, have been sanitising the nefarious activities of the NRIs by playing down their devastating influence on the nation's economy. Fiscal prudence thrown to winds in banking sector:
The PSBs have to follow RBI guidelines to reinvest or to float their own rates of interests to attract investments. However, private sector banks have been afforded flexibility in these areas to go their own way without government audit. Consequently, there has been a mushrooming growth of Non-banking Financial Companies (NBFCs) and Mutual Funds inviting investments at exorbitant rates of interest only to vanish with the loot overnight. Large amounts of funds advanced by PSBs to private sector have been lying unpaid as non-performing assets NPAs as these banks could not annex the properties created with ease. Here, the industries built with these funds are made sick on purpose only to keep the promoters affluent. Natural resources, essential services too kept at NRIs' disposal:
Priority has been accorded to NRIs in the allocation of natural resources like iron ore, coal, bauxite mines etc for new ventures in forest areas, uprooting the tribes living there for ages. The private sector has also been encouraged to develop infrastructure in other areas like water supply, power supply, natural gas, healthcare, agriculture and even education; keeping them out of reach of the common man. Thus, whatever was being handled in public sector in the public interest has been vested in the hands of the private sector to exploit with no questions asked.PSEs denied level-playing field:
The Public Sector has not been allowed to operate its businesses on an equal footing with Private Sector. Funds have not been allotted in right time to innovate, automate, infuse new technologies or to upgrade obsolete equipment it is saddled with at the speed with which private sector has been provided to increase its productivity. Private sector could resort to downsizing, right-sizing, pruning or minimizing of manpower to reduce cost of production which concept was also thrust on PSEs resulting in massive retrenchments. Industrial policies and labour laws have been amended to facilitate cheap labour with more working hours, less industrial safety and no penalties for violations suiting NRI requirements of low wage bills for workers. PSEs don't have the freedom to recruit, offer suitable wages, incentives and perks to retain their experienced hands as the private sector could do. There has been an exodus of skilled PSE manpower, including CEOs to private sector lured by hefty pay packets and perks, pushing PSEs into crisis. Unlike private sector, public sector has been forced to pay accident compensations, full taxes and tarrif rates, high interest on investments conforming to all industrial and commercial laws and maintain townships as a social obligation . Private sector has been totally relieved of these governmental red tape. This unfettered freedom afforded to private sector has given rise to vast disparities between public and private sectors performance. Private sector exempt from statutory scruitiny as well:
In the public sector, every decision making activity: managerial, financial and operational, has to be meticulously recorded and every single penny spent has to be accounted for government audits. Private sector on the contrary, including banking, has been exempted from this crucial statutory requirement and given a free hand to manipulate their accounts without government audit to permit profiteering. PSEs have thus been forced to end up as loss making ventures, thereby unfairly branding them as inefficient; with an ulterior motive of divesting them to private sector for a pittance. CSR and Inclusive Growth initiative, an eyewash:
When a hue and cry was made about the disastrous effects of globalisation-privatisation drive on the middle-class, the marginalised sections of the society and the poor, an attempt was made by Prime Minister to urge private sector pay for their sins in some form. In order to meet this challenge, it's come forward under the aegis of the CII, to spend a paltry sum of 2% of their 'allocable?' surplus profits by way of Corporate Social Responsibility, an ISO 26000 stipulation already in vogue among industries abroad, to cater to Inclusive Growth on its part. NRIs' plunder legitamised and Resident Indians victimised:
Restrictions on transferring money from India freely to their countries of residence have been removed and Dual Citizenships offered to NRIs who settled abroad to grow their businesses both in India and abroad. In contrast, indigenous businesses have been trounced by increasing interest rates for working capital as well as for new investments and by removing the items reserved for small scale sector in favour of NRIs. As a result, the Indian labour has fallen by the wayside, unemployment increasing unprecedented, inflation galloping northward, the people whose lands have been acquired forcefully for 'public (NRI) interest' thrown onto roads and farmers' suicides have been increasing manifold. Privatisation made India Eclipsed:
The once vibrant public economy has become manipulative private enterprise in over two decades of globalisation initiative. The rich have become richer and the richest Indians contributing to the world's billionnairs club year after year. On the other hand, the lower middle-class has become poor, the poor the poorest pushing the poverty line up considerably. As every economic activity is afflicted with privatisation, the entire nation now sits up to witness helplessly the hidden agenda of privatisation unfolding in its various criminal avatars: scams, corruption, bribery, nepotism, opportunism, favouritism and rowdyism. The governments both at the centre and states and the entire law and order machinery in the country is engaged in coping with a-scam-a-day situation leaving the aam aadmi in the lurch.
