How would Modi justify nation's security being 'mortgaged' to private companies?

Written by Sandeep Pandey, Sanjay Singh | Published on: August 5, 2019

A fact to which the press, and by extension the public, did not pay much attention was when Modi, serving Chief Minister of Gujarat, came to New Delhi in 2014 to take oath as Prime Minister, he used Adani's aircraft. The implication of it only now dawns on us as Adani emerges as the biggest beneficiary of Modi's government.




As Modi returns to power with thumping majority in 2019, a group of Ministers have been empowered to proceed with fast pace disinvestment of various public sector units like Oil and Natural Gas Commission (ONGC), Indian Oil Corporation (IOC), Gas Authority of India Limited (GAIL), National Hydroelectric Power Corporation (NHPC), National Thermal Power Corporation (NTPC), Coal India Limited (CIL), Bharat Heavy Electricals Limited (BHEL) speech the Finance Minister Nirmala Sitaraman announced that the government will look to reduce direct controlling stakes in some of the state runs firms by bringing down its holding below 51% level, the minimum holding required for an entity to qualify as central public sector enterprise.

PM Modi's administration already sold government stakes in a host of companies to raise a record Rs 2.82 lakh crore in his first five years term, nearly three times the divestment proceeds of nearly Rs 1 lakh crore achieved by the Congress party led government during 2009-14. The government further plans to raise Rs 3.25 lakh crore over the next five years by bringing down its stakes to 40% in some cases, to meet its fiscal deficit. In future government is likely to reduce its shareholding to 26%.

The government holding in IOC was 82% in 2006, 68.57% before Modi's ascension to power in 2014 which now stands at merely 52.18% in 2019. Curiously Indian Oil has entered into a joint venture with Adani Gas Ltd. to form Indian Oil Adani Gas Ltd. Most of the contracts for City Gas Distribution have gone to either Adani Gas alone or its joint venture with Indian Oil.

Adani group has emerged as the largest private sector CGD player in the country. State-owned IOC and GAIL have signed 20 years offtake agreement with highly indebted Adani group for 3 million tonnes per annum and 1.5 mtpa, respectively, to promote Liquified Natural Gas terminal at Dhamra in Odisha.

In 2013 Adani group had 44 projects in India in the areas of CGD, coal mining, agri commodities, logistics, thermal power, power distribution, solar energy and ship fuelling. By 2018 it had further consolidated in these areas and expanded to new areas of airport management, wastewater treatment and defence to take up its projects to 92 in addition to its overseas operations. Its total debts stand at about Rs 1 lakh crore, among the highest of Indian conglomerates.

While Adani has been the preferred partner in profitable ventures of the PSUs, they are made to bear the brunt of populist schemes like the PM Ujjawala Yojana which don't guarantee profit. According to Dharmendra Pradhan, Minister for Petroleum and Natural Gas, the refill rate of Liquified Petroleum Gas cylinders distributed under Ujjwala was only 21.16% where refill is defined as even taking one cylinder in a year.

Normally, 7-8 cylinders are required in a household annually. The loss was borne by the dealers who gave the first cylinder free along with the stove and then were supposed to recover their cost from the second cylinder onwards.

Modi doesn't leave any occasion to criticise the Congress party leaders, present and past. Especially on target is Jawaharlal Nehru. While one may disagree with the economic policies of Nehru government, the fact is that the BJP government is essentially making money by selling assets which were created by the first independent government of India or were a creation of extension of the policies for strong public sector.

The irony is Modi is able to camouflage this sale of national assets, subsumed under his politics of nationalism leaving critics within or without his party nonplussed.

Another example of how private companies are being blatantly promoted is how a new entrant in field of communications Reliance Jio was given the facility of 4G spectrum whereas Bharat Sanchar Nigam Limited was denied this and using the 70,000 towers of BSNL, Jio, a company personally promoted by the PM, has begun dominating it in the market. 
 
If defence sector is opened up for corporatisation-privatisation what will prevent it from being dominated by oligopolistic market economics?
For the first time 82,000 employees of ordnance factories have decided to go on a month long strike since 20 August 2019 against the decision of central government to corporatise the ordnance factories. Ordnance Factory Board (OFB) is the largest arms producer in India and 37th in the world. Its importance for nation's defence preparedness cannot be underestimated.

The government has taken a decision to convert this department to a Public Sector Unit whereas it is bent upon disinvesting other PSUs. Hence, privatisation is a natural consequence of corporatisation given that the Modi government has opened the defence sector for 49% Foreign Direct Investment.

Additionally, any private company would be interested in the sixty thousand acres of vast land available with OFB as it becomes difficult to take away lands from farmers because of stiff resistance offered.
 
Importance of OFB can be gauged from the fact that during Kargil war, anniversary of which was celebrated recently with much fanfare, OFB stretched its capacity in all critical items to the extent of 200% whereas out of 129 contracts worth Rs 2,175.40 cr. placed with private players, 81% materialised six months after the war was over.
 
A relevant question to be asked is if defence sector is opened up for corporatisation-privatisation what will prevent it from being dominated by oligopolistic market economics? From the past experience most of these companies are likely to be interested more in assembly than in manufacturing and we'll become dependent on imports. Will that be in national interest?

It is unclear how Modi is going to justify the nation's security being mortgaged to private companies whose raison d'etre is profit. By his own admission India is not an aggressor state. India is not United States, where the sustenance of the huge military-industrial complex necessitates periodic wars or a continuous military engagement of some intensity. In 2003 US lied to the world about presence of weapons of mass destruction in Iraq as an excuse to launch a military attack.

Crucial question is what will he sell when he has sold everything created by the past governments? The things that he is creating, like the statue of unity, will not have a sale value.

Modi is taking the country on a dangerous path in more ways than one.---
 
*Sandeep Pandey is Magsaysay Award winning social activist and vice-president of Socialist Party (India), Sanjay Singh is Member of Parliament, Rajya Sabha belonging to Aam Aadmi Party. Contacts: [email protected], [email protected]

Courtesy: Counter View