Public sector is the lifeline of the marginalised

Of late, the Congress party is realising the folly of departing from the fundamentals of secularism, socialism and democracy. It appears that the party has committed hara-kiri by sidestepping the Nehru-Fabian ideology of giving commanding heights of the economy to the public sector.

It started when PV Narasimha Rao, Manmohan Singh and a chosen few from the World Bank carried forward the ideology of the Washington consensus which allowed the private sector to rise. The scams that were considered as a conduit to transfer public and common properties to the government’s cronies became public policies during the UPA and NDA regimes.

It was during this period that the late PS Krishnan, a committed civil servant, described how the UPA cared less for the Special Component Plan (SCP) of Dalits and even imposed an embargo on a Bill approved by the National Advisory Council headed by Sonia Gandhi.

I have published one of the first papers and, later, books on the impact of the new economic policy on the marginalised groups. It was pointed out that the investments made in the public sector were the legitimate share of the marginalised poor. There is a direct relationship between the unspent amounts of the SCP and the investments made by the government.

The existence of the public sector is not an innovative idea but a legacy that we have inherited. India boasts of the presence of the public sector at least from the time of Chanakya who has mentioned about the prevalence of superintendents like the sutradhyksha who supervised state manufacturing textile units in his Arthashastra.

The role of the state in economic activities was not seen just in India. It was also a phenomenon in Oriental societies. Marxist dissenter Wittfogel wrote on the hydraulic societies in Asia as those that relied heavily on state-supported irrigation and public works. Adam Smith, father of economics, argued for public works and judiciary to be kept with the state, though he was a libertarian. The Fabian society, democratic socialists and Marxists throughout the world have been arguing for the need for the public sector in modern economies.

There is a group of economists who has developed theories to sustain the public sector as a part of the economic development strategy. They believe that it provides the much-needed shock absorber in an economy that might experience turbulences like inflation, depression, unemployment and other temporary disturbances in a market economy. They are of the view that the public sector provides the gear to the state to steer through.

We have seen during the Covid pandemic that societies that are heavily relied on the private sector have failed while the few that have public sector healthcare and enterprises have sustained. Studies provide data that the public sector in India, including its

R&D establishments, was responsible for the sustained growth of the economy, contributing as much as

Rs 1,74,587 crore as profit in 2019.

However, a group of paid intellectuals and cronies of corporate interests, with publications on the ‘invisible foot of the public sector’, has come up with theories that the public sector promotes inefficiency and corruption. They have recommended privatisation or abolition of the licence-permit raj with less governmental role and more margins.

Interestingly, this trend has promoted contractor raj in the name of PPP (public–private partnership). The so-called libertarians are silent when NPAs worth lakhs of crores of rupees are written off as markers of inefficiency of the private sector. They have all gone into the accounts of the ‘dwijas’. None from the marginalised sections has the opportunity to receive contracts, not even from Gujarat.

The constitutional provisions for the public sector and access to this sector given under Articles 15(4) and 16(4), popularly known as caste-based reservations, were made infructuous and useless. The role of the public sector in mitigating economic exploitation in the private sector and in keeping the savings of the people as investments for posterity was considered by Nehru and Ambedkar, like some of their contemporaries in the UK and Europe, who advocated different models of development through planning. They considered the public sector as the panacea to getting access to organised employment for the Dalits and Bahujans, who had been denied opportunities so far. Articles 38 and 39 have fortified these provisions.

The present shift to arguing for reservations in the private sector is a supplementary argument when the role of the public sector has dwindled intentionally to reduce access to jobs for the reserved groups. Privatisation has helped generate super-rich corporates who are alleged to have bought/ appropriated public properties at discounted rates. This has further widened the gap between the rich and the poor, leading to just 1 per cent of the Indians holding 58 per cent of the national wealth.

The founding fathers of our nation, including Ambedkar, Nehru and Lohia, have provided arguments for the continuation of the public sector in our society that has inherited several inequities and diversities. India cannot ape a settlers’ country like the US or tiny capitalist countries.

But the self-seeking cronies have not bothered to read the works of the founding fathers. They misinterpret and abuse the esteem bestowed on intellectuals by writing reports and stories against the profit-making public sector units so as to ultimately to benefit the corporates. It was during 1990-2016 — the golden age of privatisation — that the number of government companies increased from 1,166 to 65,245 and private registered companies from two lakh to 10.23 lakh.

Interestingly, the investment of the private sector was Rs 17,193 crore in 1989 and it has increased to Rs 16.74 lakh crore, while public investment was more than double the size in 1989 at Rs 47,051 crore and now is at Rs 32.87 lakh crore, mostly utilising internal resources. But, public employment started dwindling from 190.57 lakh to 176 lakh during the period, indicating the downsizing of opportunities for the reservation groups, including 10 per cent EBC who claim that it is the public sector that provides them the lifeline to sustain in the globalised world.