Financial Profligacy in the Making?


The plan to marketise the vast infrastructure architecture of the country on the stock market for a windfall gain of Rs.6 lakh crore for the government has predictably agitated the opposition as it amounts to gambling with the ‘family silver’.I have no intention to pose as an expert in public finance as I have not even elementary knowledge of the subject.But I would like to venture some opinion on the basis of things I have some knowledge of.

The complete transfer of public properties to corporates driven by profit with government holding nominal ownership is as breath-taking as demonetization and the GST.The lack of adequate discussion in parliament and its replacement by ceremonial inauguration with religious aura has kept the general public in the dark and they have suffered miserably in consequence.This new initiative started with similar surprise and sanctimony may also inflict similar nasty surprises in times ahead.

It is a common mistake to think that public ownership aiming primarily at delivering public goods is bound to be ineffective and loss-making.In fact in Germany roads are state-owned,so is the postal service.

In Britain the hasty privatization of British railways by the impetuous Margaret Thatcher led to the notorious Hatfield accident which in turn forced her to re-nationalize at least the rail track.A sizable proportion of industries and service enterprises remains state-owned in the West without any hitch.Particularly those requiring strict safety standards and delivering essential public services.There is also a concept of public good,which incidentally includes open space for purposes of general health as well as public assemblies for airing of views on public affairs.Our present government seems bent on out-Thatchering Margaret Thatcher.

When the sub-prime stock crisis of the United States affected most of the economies of the world then Prime Minister of India Atal Bihari Vajpayi mused that India had escaped the shock thanks to its having a different economic system.Yet he also had in his cabinet a Disinvestment Minister.

The actual meaning of state ownership and management of public enterprises is ensuring that goods and services benefitting the general public are not left vulnerable to market volatility driven by competitive greed.

There are times when relative to other industries and services these sectors might not yield a desired rate of profit.That in turn might induce the majority stock owners to divert funds and allow deterioration in quality and neglect of due maintenance.For instance owing to the greed of contractors roads in Assam,pitched casually, develop potholes sometimes the size of a small car or the surface literally peels off.The embankments to prevent floods also wear out before the year ends causing huge annual misery to villagers.Repeated repair is the golden goose for such hunters of profit from public distress.

Hence the political philosophy underlying our constitution will be undone by such unbalanced speculation by a government in power.The constitution has upheld public good as more than a mere aggregation of private gains.It requires ,indeed obliges the state to ensure a certain measure of welfare to the general public irrespective of the costs involved,in order to build the conditions of equality to the citizens,a fundamental goal for our state.

The latest shocker is the proposed hand-over of the LICI to corporates.All the usual reasons cited for such privatization such as chronic and irreparable loss or inefficiency do not apply here,for LICI has made comfortable profit and yielded satisfactory revenue to the government.Above all its record in gain of public confidence as well as quality of service beats those of private insurance companies battering on premiums from insurers and skimping benefits to insurees.

It is a fatalistic idea to hold that these are mere policy matters,as sometimes the courts seem to say whiling washing off their hands.I believe it is a grave challenge to the very character of our state.

Hiren Gohain is a social scientist and a literary critic


Support Countercurrents

Countercurrents is answerable only to our readers. Support honest journalism because we have no PLANET B.
Become a Patron at Patreon

Join Our Newsletter


Join our WhatsApp and Telegram Channels

Get CounterCurrents updates on our WhatsApp and Telegram Channels

Related Posts

Join Our Newsletter

Annual Subscription

Join Countercurrents Annual Fund Raising Campaign and help us

Latest News