Issue 69 Vol III, August 15, 2008
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Issue 69 Vol III, August 15, 2008 |
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F E A T U R E S Inkling
about reforms and disinvestment THE year 1991 had witnessed a major economic crisis in India when, due to many reasons accumulating over the years, especially in the eighties, the macro economic scenario became very gloomy, and the macro economic problems got accentuated. There were many reasons for this. One basic reason was the growing fiscal deficits in terms of the revenue and the expenditure accounts of the government. The other was the deteriorating balance of payments situation in terms of income and expenditure of the economy as a whole. In fact, the internal imbalance in the fiscal situation and the external imbalance in the payments situation get closely related when there is an absence of prudence in the macro management of the economy, and when the economy attempts to live beyond its means. This reality was, in fact, completely ignored by the Government and the macroeconomic policies of the eighties forced the economy to live beyond its means both through internal and external borrowings. Apart from other things, this had serious fallout in terms of high inflationary pressures. The rate of inflation rose to 10.3 percent per annum in 1990-91, and, in terms of the consumer price index, it went up to 11.2 percent per annum. This was a serious cause for concern. The end result was a deep economic crisis that gripped the economy in early 1991. A few other reasons like, the Gulf war in late 1990, and the political instability in the country at that time worked as positive catalysts in accentuating the already grim situation in the country. In order to get over this appalling situation the only way out was to introduce economic reforms. The conditions were so desperate that the country was pushed towards the reforms process. As a result, it was in July 1991 that the economic reforms package was introduced, comprising both of macro economic stabilisation and structural reforms. Macroeconomic stabilisation basically implies cutting down fiscal deficits and the rate of growth of money supply. In other words, it focuses on control of inflation, fiscal adjustment, and balance of payment adjustment. Structural reforms aim to improve the supply side of the economy, and focus on trade and capital flows, financial sector, industrial deregulation, and disinvestment of public sector undertakings. The reforms package also implies globalisation in terms of integrating the economy with the world economy. In other words, globalisation amounts to gradual opening-up of the economy. Globalisation also implies privatisation in the sense of giving greater powers to individuals to mange the affairs of the economic system at the macro level. In essence, it leads to decentralisation of the functioning of the economic system with result that the public sector becomes relatively free to manage the affairs of certain strategic and key areas. In the context of the on-going reforms process this Paper briefly focuses on four aspects of disinvestment and privatisation. It initially talks of the rationale of disinvestment, and then depicts the present scenario, and then underlining some of the weaknesses of the disinvestment policy, it concludes by suggesting a few positive measures for an all-round success of privatisation. I. THE RATIONALE As we have already said, disinvestment of public sector undertakings is an important component of structural reforms. This is one of the ways to make the economy market-friendly, encourage privatisation, and open the gates for foreign investment. Apart from all this, disinvestment also achieves another major objective in the functioning of the Government. The government’s job is not essentially in business, it is in other important spheres like, governance, social provisions, and security (both internal and external). It is through the process of disinvestment that the government gradually gets out of its unwarranted business and gets time to focus on its important roles. It is rather surprising to note that the government has invested an enormous amount of Rs.270, 000 crores of public money in 240 public sector undertakings, and that too without creating sufficient employment for the people. Apart from accommodating an extremely low percentage of the labour force, a majority of the public sector undertakings run in a loss. The scenario is even worse at the state level. It is, thus, seen that public sector undertakings do not create much employment, and, hence, we have all the reasons to support the policy of disinvestment and privatisation. II. THE SCENARIO India has now entered the second phase of Reforms. The economic impact has been encouraging (though slowly) especially on the industrial front through various policies including the policy of
Coupled with all this is the development of the information technology sector, which is, perhaps, more because of the technological boom in the United States, and India’s subsidized system of higher education in that sphere, and less because of economic reforms. Despite these shifts, it is rather unfortunate that the country is experiencing the lowest industrial growth and low profit growth, because of an acute slowdown in the manufacturing sector. This has led to the process of restructuring and downsizing, and hence reduction in the existing employment opportunities through voluntary retirement schemes (VRS) and retirement policies. This has resulted into severe lack of job security, and has further added to the gloomy employment scenario in the country The economic impact on the agricultural front has not been satisfactory too. In fact, there has been a prolonged stagnation in agriculture in recent years, which has led to a slack of demand for industrial goods. There is, therefore, an urgent need of egalitarian economic reforms, and effective food security system. The social impact of the reforms process has almost been negligible in terms of poverty alleviation, employment creation, income equalities, and social provisions, basically because of poor governance and ineffective implementation of existing laws. In fact, it appears that the social sector reforms have not yet begun. Despite the gloomy scenario both in the industrial and agricultural sectors in recent years, the overall scenario of the economy is not that bad. Foreign exchange reserves are burgeoning. The current account deficit is safe. External debt is manageable. Inflation is moderate. Foodgrain stocks are huge. The economy’s growth rate has been highly impressive by world standards. Talking of disinvestment, it is seen that the process of disinvestment has been made a political issue by some sections on the grounds that it has amounted to plunder of public wealth, and, therefore, should not go ahead. In fact this political bottleneck is just a political strategy of some political entrepreneurs who are guided more by their own vested interests than by national interests. They are well aware of the fact that the decline in the number of public undertakings will, somehow, adversely affect their political hold and the accompanying ‘rent-seeking’ and ‘directly unproductive profit-seeking’ activities. This opposition is just a political gimmick and will have no long-term impact, whatsoever, on the on-going process of disinvestment. III. THE WEEKNESSES Despite the fact that disinvestment is one of India’s recent successes, the process and its outcome indicate many weaknesses and drawbacks. Some of these are briefly described below:
IV: THE LAST WORD Privatisation is not just limited to the sale of the existing public sector undertakings to the private investors. It does not mean that the role of the government in business ventures will get completely eliminated once all the public sector undertakings have been sold to the private sector. The process of disinvestment and privatisation will go on for all time. Public sector will always have to play an important role in strategic areas like, water, power, and infrastructure. It will have to act like a venture capitalist, who starts a project, takes it to optimal heights, gets out of it, and then hands it over to the private investors, and moves on to other projects.
Just like everything else the policy of disinvestment and privatisation has both positive and negative effects and fallouts, both in the short-term and in the long-term. The Government has to be careful in assuring, of course within the given assumptions, that the net effect of this process, essentially in the long run, does not in any way become immiserising for the country as a whole. The future is there, but we have to make it bright. |
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Shacks of construction workers removed
so that CM could pay tributes to Comrade Surjeet COMRADE Surjeet must have spent his entire life to organize the workers for their rights, but the Punjab government officials did not show any mercy to the roadside construction workers, whose shacks were removed so that the state Chief Minister, Parkash Singh Badal could pay tributes to the deceased communist leader. It is learnt that the shacks of the poor construction workers were removed in Rurka village to ensure the safe landing of the helicopter carrying Badal and his staff. The desperate revenue officials, who were supposed to find out a suitable spot for the helipad picked the one that was occupied by these workers. One of the officials told the SAP that they couldn't find such spot in Bundala, the native village of Surjeet so they decided to find one in Rurka.
Cutting across party lines, a number of top politicians paid tributes to late Comrade, Harkishan Singh Surjeet at a memorial function that was attended by thousands of his supporters at Bundala on August 10. All roads leading to the village stadium, where the grand function was organized by the Marxist Communist Party of India, CPI (M) were decked up with red flags and posters of Surjeet. The air was filled with slogans like, ``Red salute to Comrade Surjeet’’ and ``Long live revolution’’. His supporters came from distant areas and many of them were seen wearing red T-shirts and bearing red flags. The heavy security arrangements due to the VIPs’ presence turned this event into a state function.
The leaders of the Congress party also attended the function despite the fact that the CPI(M) had recently withdrawn support from the Congress led coalition government of India in protest against the Indo-US nuclear deal. The communists had lent support to the government from outside to keep the Hindu nationalist BJP out pf power. Surjeet was instrumental in forming this government. His death on August 1 coincides with the breaking up of this alliance. Speaker after speaker acknowledged Surjeet’s role in the freedom struggle and his secular views. Both Badal and Bhandari admitted that they admired him as a towering leader and his death is not only a loss to the communist movement but to the whole nation. Bhandari said that although he had ideological differences with Comrade Surjeet, but his participation in the peoples’ movements made him a great leader, whose advice was valued by the most Prime Ministers. A senior Congress leader, Pawan Kumar Bansal who had come from Delhi, paid tributes to Surjeet on behalf of the party president, Sonia Gandhi - who had earlier attended his funeral. He reminded the crowd that the Prime Minister, Manmohan Singh had described Surjeet as a true patriot. The CPI(M) general secretary and Surjeet’s successor, Parkash Karat not only underlined his contribution to the freedom struggle and communist movement but also to the international solidarity with Cuba, Vietnam and Palestine. He recalled how Surjeet had lobbied with different chief ministers of the Indian provinces to arrange for wheat for the Cuban people who were suffering due to the US blockades. A veteran freedom fighter and contemporary of Surjeet, Gandharvsen also spoke on the occasion. He recalled the times he had spent with the deceased leader in jails. Several condolence messages were also read by the organizers, including the one sent by the Indo Canadian Workers’ Association (ICWA), whose leader Kulwant Dhesi had attended the funeral in Delhi. Surjeet was a frequent visitor to Canada until he fell ill. The ICWA is organizing a special condolence meeting in Metro Vancouver on August 24. Undoubtedly, Surjeet deserved such tributes but some of the highlights of the event turned it into a tokenistic gesture of the bourgeois' politicians.
Comrade
Harkishan Singh Surjeet, an era is over VETERAN CPM leader Harkishan Singh Surjeet, who passed away today at Noida's Metro Hospital at the ripe age of 92, was a leading general of many a battle. This old war horse of the communist movement in India, struggled for months to defeat death before finally bidding good bye to his large number admirers within the communist movement as well as outside.
It was for nothing that while tabling motion seeking vote of confidence in the Lok Sabha on July 21 Prime Minister Dr Manmohan Singh paid glowing tributes to Surjeet’s skill at weaving and sustaining broad secular progressive anti BJP coalitions. “If we are here after tenure of four years, the credit for all this should go… to the wise and visionary leadership of Jyoti Basu and Harkishan Singh Surjeet. They were all architects of our coalition government. It is their wisdom and sagacity that has helped the government to function.”
After retiring from his post as General Secretary in 2005, Surjeet continued to play an active role in Indian national politics. Many times, including after the 2004 Lok Sabha election and during the 1996-1998 United Front government, his role has been that of an astute coalition maker in parliamentary politics, mending and collecting broad coalitions, a la Chanakay style. He could go to his worst foe and turn him into a friend. For him welfare of the common masses, national unity and progressive thought were the corner stones for any political arrangement he sought. His opposition to extremism, both of the right and left variety was well known. Neither he nor his party men wilted in Punjab, losing dozens of lives. Though he had not much formal schooling, life has been his university and could write with felicity both in his mother tongue Punjabi and English. He was an excellent orator, always convincing with arguments and never rabble rouser.
In 1936, Surjeet joined the Communist Party of India . He was a co-founder of the Kisan Sbha in Punjab and later he was its president at the national level, a tribute to his organidational skills. In punjab, he would be for long remembered for the struggle of peasants; the Betterment Levy agitation where another communist leader A.K,Gopalan palyed a significant role. In the pre-war years he started publishing Dukhi Duniya and Chingari. During the war, Surjeet was imprisoned by the colonial authorities. When India became independent in 1947, Surjeet was the General Secretary of CPI in Punjab. 12 years ago, he esablished Desh Sewak, a punjabi daily from Chandigarh. Harkishan Singh Surjeet was the General Secretary of the Communist Party of India (Marxist) from 1992 to 2005 and was a member of its Polit Bureau from 1964 to 2008. He retiried at the age of 89, yet continued to play an active political role. With his health declining, Surjeet was, for the first time, not included in the CPI(M) Polit Bureau at the party's 19th Congress in April 2008 in Coimbatore. He was designated as Special Invitee to the Central Committee.
Practical communist HARKISHAN SINGH SURJEET was variously described as a dealmaker, an earthy leader, a practical communist, a kingmaker and a Marxist in the classical mould. He was all of these and much more. He might not have been a theoretician like the late B.T. Ranadive or a parliamentarian like the late A.K. Gopalan, a mass leader like Jyoti Basu and a prolific writer like the late E.M. S. Namboodiripad but he was certainly one among those tallest leaders of the CPM. He came into politics, inspired by the heroics of Bhagat Singh, who was himself a Leftist. Like his political ideologue, Surjeet believed that independence could not be won through non-violent means alone. Little surprise, when he was tried for his violent defiance of the law, Surjeet had the audacity to tell the British judge that his name was London Tod Singh (one who breaks London).
Few were, therefore, surprised when Prime Minister Manmohan Singh mentioned his name and that of Jyoti Basu as the architects of the Left-supported UPA government during the debate on the confidence motion last month. Had ill-health not prevented him from playing his rightful role as a communist paterfamilias, there would, perhaps, have been no rupture in the UPA-CPM relations. Surjeet would have found a solution that would have been acceptable to both Prime Minister and his younger colleague and successor Prakash Karat. In Harkishan Singh Surjeet’s death, the country has lost a leader who was one of the best practitioners of the art of the possible, also called politics.
Sri Lanka: free journalist and other critics THE Sri Lankan government should release a prominent journalist and two others connected to a website critical of the government, Human Rights Watch has demanded. The three have been held without charge since March under emergency regulations. It is a blatant misuse of emergency powers. On March 7, 2008, the police Terrorist Investigation Division (TID) arrested J.S. Tissainayagam, a columnist with the Sunday Times newspaper and editor of the Outreach website. The previous day the TID had arrested N. Jasiharan, the owner of E-Kwality press, and his wife V. Valamathy. Tissainayagam and Jasiharan are co-directors of the company Outreach Multimedia; Valamathy has no official role with the company. In a court appearance on June 23, Jasiharan stated that TID officers had assaulted him. “The three have spent more than 150 days in custody, yet no charges have been filed and no evidence of any crime has been produced,” said Brad Adams, Asia director at Human Rights Watch. “If the authorities have no credible basis to charge Tissainayagam and the two others, they should be immediately released.” The government has yet to provide reasons why the three were detained. Tissainayagam has been critical of the government on many issues. At the time of his arrest, government sources suggested that he may have connections to the armed separatist Liberation Tigers of Tamil Eelam (LTTE), but have produced no evidence of this. Reports have suggested that Jasiharan and Valarmathy were detained due to their connections to Tissainayagam. Journalists and others who are vocal critics of the government are often accused of having links with the LTTE and branded as traitors and terrorists. Human Rights Watch expressed deep concern at the government’s disregard for Sri Lankan and international law in these cases. Detention orders for the three were not issued at the time of arrest as required by the emergency regulations. On March 27, the attorney general’s department stated before the Supreme Court that a detention order had been issued for Tissainayagam, but said that the order was not in their possession to be given to the courts or the detainee. Later the same day, a detention order was issued to Tissainayagam, backdated to March 7. None of the three detainees has had adequate access to counsel. Tissainayagam has been allowed visits by his lawyers only twice. On both occasions, police officers were present during the discussions, violating his right to communicate and consult with a lawyer in full confidentiality. The three have filed a fundamental rights petition in the Supreme Court challenging the legality of their continued detention. On July 11, the attorney general’s department informed the Supreme Court that investigations into Tissainayagam’s case had been completed. But the attorney general’s department obtained an extension until August 20 to report back to the court on the status of the investigations. Human Rights Watch said that the slow pace of the investigation reflected broader concerns about the department’s independence and impartiality that raised troubling due process issues. “The attorney general should release the three, instead of continuing to violate their rights under domestic and international law,” said Adams. “By detaining a prominent government critic without charge, he is seriously risking the credibility of his office.” Human Rights Watch reiterated its concerns about sweeping emergency regulations introduced in August 2006 after the assassination of Foreign Minister Lakshman Kadirgama. The present regulations give the security forces expansive powers of search, arrest, detention, and seizure of property, including the authority to make warrantless arrests and to hold individuals in unacknowledged detention for up to 12 months. Most of those detained under the emergency regulations are young Tamil men deemed by the security forces to have LTTE ties. Increasingly, however, the regulations are being used against Muslims and Sinhalese who challenge or criticize the state. |
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in Canada,
Another irony of the event was a contrast between the rich and the poor, the
elite and the working class that was visible at the venue of the gathering. The
VIP gate was open for the relatives of Surjeet and other affluent people, who
were provided with chairs, while the ordinary communist workers sat on the
ground in the back. Some of the relatives of Comrade Surjeet were seen bullying
the junior police officers and scolding those stood between them and the
electrical fans that were installed because of the hot weather.
Though Surjeet was the former General Secretary of the CPI(M), his popularity as
a leader of the national stature was reflected at the event with the presence
of leaders from the parties opposed to the communist ideology. Notably among
them were Badal, who is also a leader of the Akali Dal and the Punjab BJP
President, Rajinder Bhandari. The communists consider both the parties as
communal.
He is one
major communist leader from India who would be missed for long not only in
China, Cuba, and Pakistan and in the Arab world, but in many European and North
American cities. Count Fidel Castro and a dozen odd Chinese leaders amongst the
mourners. Russian communist leaders had come to meet him to understand the
united front experience in India. Made of hardy peasant stuff, Surjeet while
staying resolutely with his Marxist ideology and party commitments could make
friends across political spectrum. “I tell you, no one has ever deceived me.
People have some essential goodness about them”, He once told me as he counted
his numerous meetings even with BJP leaders like former prime minister Atal
Bihari Vajpayee. Both belonged to different and clashing ideologies. Surjeet’s
steadfast opposition to the BJP and communalism is admired even by his worst
detractors in the broad area of left movement. He was instrumental in forming a
number of anti-BJP coalitions in the 1990s and for ensuring left support to the
present UPA government.
Among Delhi’s
political circles it was widely believed that if Surjeet had not been seriously
sick, he would have worked out a way to sustain the UPA government. This
assessment is not without reason. “Mrs. Sonia Gandhi and Manmohan Singh are
good people. One has to work to keep the coalition together and on right track.
They tend to forget the basic programme. But that is no problem”, Surjeet had
recounted to me during my meeting at his Delhi residence after he had ceased to
be the general secretary of the CPM but still was the main architect of party
programme, strategies ad day to day tactics. We can recall similar role in
keeping the Akalis together in Punjab as he believed that there was progressive
laments amongst them. In Chandigarh, I often met him at the residences of one or
the other Akali leader. He could count friends all across in politics, media and
even some business circles too. If he could refuse any donation from the
Reliance, he could seek small donations from middle or small entrepreneurs. He
had a large personal following and helped each one whenever there was need for
that. Always positive, forward looking and never downcast even when he faced
bullets and had to lead a tough underground life, he would have a bewitching
smile on his face.
Born to a
Bassi Jat family in Badala on March 23, 1916, Jalandhar, Surjeet started his
political career in the national liberation movement when he was very young. It
was the legendary patriot, Bhagat Singh who inspired him. In 1930 he joined
his movement, Naujawan Bharat Sabha. On the anniversary of the martyrdom of
Bhagat Singh, Surjeet hoisted the Indian tricolour at the court in Hoshiarpur,
and he was shot two times. Later he was punished by the colonial British regime.
In court he stated his name as London Tod Singh (one who breaks London).
He did not break London but he gravitated to
the nascent Communist Party of which he became the Punjab unit chief by the time
India became independent. And when the CPI split in the sixties, he found
himself in the company of AKG, Jyoti Basu and EMS. When health reasons compelled
EMS to quit the post of General Secretary, Surjeet was his natural successor. It
did not matter to the party that in his own Punjab, the CPM did not have much
presence. He remained general secretary from 1992 to 2005 during which period he
played a stellar role at the Centre earning the sobriquet of a modern-day
Chanakya. When the H.D. Deve Gowda government hurtled from one political crisis
to another, it was Surjeet who worked behind the scenes to settle disputes, to
assuage hurt feelings and to bring together warring groups.