{"id":148638,"date":"2021-03-21T11:40:00","date_gmt":"2021-03-21T06:10:00","guid":{"rendered":"https:\/\/www.indialegallive.com\/?p=148638"},"modified":"2021-03-30T16:37:49","modified_gmt":"2021-03-30T11:07:49","slug":"psus-whose-wealth-is-it-anyway","status":"publish","type":"post","link":"https:\/\/www.indialegallive.com\/column-news\/psus-whose-wealth-is-it-anyway\/","title":{"rendered":"PSUs: Whose Wealth Is It Anyway?"},"content":{"rendered":"\n
By Inderjit Badhwar<\/strong><\/p>\n\n\n\n Whoever said that Indian elections focus on sentiments and prejudices rather than substantive national issues, got it wrong\u2014well, at least as far as the current spate of state polls, particularly in West Bengal, seem to indicate.<\/p>\n\n\n\n Apart from the usual concerns about religious polarisation, anti-incumbency, party hopping, a major focus is on a national debate on privatisation and disinvestment whereby state-run enterprises are to be gradually dismantled.<\/p>\n\n\n\n The Modi government has been upfront and transparent on these schemes. Last week, Modi\u2019s policymakers asked all their senior apparatchiks to identify government controlled and operated concerns which should be hived off for various percentages of \u201cnijikaran<\/em>\u201d or privatisation.<\/p>\n\n\n\n This has created an uproar in all opposition parties. The debate is not new to India. The private vs public sector controversy has been raging since Prime Minister Nehru\u2019s era, well into Mrs Gandhi\u2019s regime when nationalisation a-la-Mahalanobis was ideologically identified with nationalism much to the disgust of liberal economists who equated this phenomenon with statism and the stifling of the creative spirit and energies of private entrepreneurship.<\/p>\n\n\n\n Economists like Arun Shourie championed the cause of allowing state-run loss-making behemoths to go into the management of free thinking industrial innovators. This was the post-Thatcher-Reagan world supported by the theories of philosopher-writers like Ayn Rand and her expostulation of what Modi now calls his atmanirbhar <\/em>doctrine.<\/p>\n\n\n\n There was a tectonic shift in thinking after the Lehmann Brothers crisis and the disastrous collapse of the world economy starting in 2008. World leaders and their public policy advisors now advocated tighter government controls, more public sector expansion, and increased government spending and fiscal stimulus packages to stimulate spending and demand and employment, notwithstanding deficits.<\/p>\n\n\n\n Despite the shocks to the Indian economy, massive decline in GDP, following demonetisation, GST taxes, and the Coronavirus debacle, Modi has persisted in his belief in controlling government spending and monetising the government\u2019s purses through selling of Public Sector Undertakings (PSUs).<\/p>\n\n\n\n The policy has not demonstrated any substantial gains or the amelioration of the public\u2019s welfare. The political backlash it has created for Modi is the negative sentiment that the accelerated privatisation drive is benefiting pro-party crony capitalism and driving out competition. This concern is now occupying the national space.<\/p>\n\n\n\n Before this matter began to gain widespread public attention, I called attention to it two years ago in an article for India Legal which I will use below as a point of reference as well as a view.<\/p>\n\n\n\n I wrote then that amidst all the euphoria on the slicing up of the state of Jammu and Kashmir and the emasculation of Article 370 of the Indian Constitution which most Indians seem to celebrate yet few understand, there are other numbers lurking in the background, competing for attention with 3-7-0. One of these is 5.8.<\/p>\n\n\n\n This is the number which now describes the slowdown blues of the Indian economy, where India\u2019s current GDP has tanked to 5.8 percent.<\/p>\n\n\n\n