Selling more of family silver

A Cabinet note on a crucial subject indicates a very strong government intent, even if the corresponding policy takes time to take shape. It has happened with the impending decision on the resources of the public-sector undertakings [PSUs] in the country. According to media reports, the government is contemplating accepting the recommendations of the Kelkar Committee on monetising land resources of the government companies. If these recommendations go through the union cabinet, it will revive the old debate of selling family silver.

The land bank which is being targeted this time is around ports, railway land in big and middle-level cities and similar areas where the government attaches a great commercial value to its resources. However, the decision to sell this land bank is like disinvestment of PSUs through the back door, since these resources are commercial assets. It also subverts the logic of why in the first place the land was given to these companies and in other cases to government institutions. It also subverts the logic with which a welfare state that India claims to be put all unclaimed land in the government kitty through a single act of legislation.

After Independence, all land that was not legally claimed by private parties or organisations was claimed by the government and thus declared public land. It was meant to be used for social welfare activities. Within this definition came industry, because industrialisation was seen as a necessary act of social development. It is noteworthy that this definition also included big private industry as well as the PSUs. Indian cities are full of examples of private industries claiming public land for a pittance in the name of setting up facilities for workers and their families. However, this land became their only asset with time. Many industries chose to sell their highly subsidised land for profit while shutting down the industries.What this approach to public land does is that when it is given to industry, it is based on welfare politics, but when the industry is allowed to sell the same land, it is done purely for commercial reasons. In the case of PSU land under contention, the public purpose should be more forcefully asserted, given that both the land as well as its owner is the government. The government should not be governed just by commercial purpose if it needs to sell the land at all but come out with an equitable policy of using a substantial part of it for building social institutions. Only then there will be a mitigating logic to selling the family silver.