A hard sell

It is interesting to note that Swadeshi Jagran Manch (SJM), an economic think-tank affiliated to Rashtriya Swayamsevak Sangh (RSS), has finally come out with its opposition to privatisation and sale of strategic state-owned industrial assets by the government. It has openly expressed its ire and anguish on the government's reckless decision to sell large public sector enterprises. SJM'S latest reaction also serves as a reminder to the ruling BJP that the idea of building and managing strategic industrial and commercial ventures in the public sector for the speedy development of the country's economy came from no other person than Dr Shyama Prasad Mookerjee, India's first industry minister. It is important to understand the background of India's public sector and the support it received by RSS, from the very beginning.

Mookerjee, though a staunch rightist, championed the cause of public sector investment in basic and strategic sector industries in the early 1950s as the British era Indian private industrial houses had little money to set up large primary industries, carrying long gestation period. Nehru hijacked the policy after Mookerjee left the government in a huff due to his strong political disagreement over Nehru's 'Delhi Pact, 1950' with Pakistani Prime Minister Liaquat Ali Khan that led to the incorporation of the contentious Article 370 into the Indian Constitution, giving special status to Jammu & Kashmir. Mukherjee was also firmly against their joint pact to establish minority commissions and guarantee minority rights as he thought it left Hindus in East Bengal at the mercy of Pakistan. The political chasm between Nehru and Mookerjee became very deep after the Nehru-Liaquat Ali pact as Mookerjee wanted an exchange of population and property at the governmental level on a regional basis between the then East Pakistan and the Indian states of Tripura, Assam, West Bengal and Bihar as the only option under that situation to protect innocent Hindus in the east controlled by the West Pakistan government.

Although Nehru was happy about Mookerjee's departure from the government, he considered his industrial policy as 'godsend.' Political rightist Mookerjee's public sector concept fitted well into Nehru's idea of socialism. However, Nehru never credited Mookerjee for formulating such a brilliant policy document. Nehru took it forward to formulate later the important industrial policy resolution (IPR) — also on the Mookerjee line — in the context of introducing a Russian-style planned economy to rapidly grow the industry. Indira Gandhi took the policy to its extreme by nationalising a host of sick industrial concerns and private commercial banks, more for political reasons than economic. There was no policy to turn nationalised sick units modern and profitable within a period.

A brilliant practical economist and barrister at law, Mookerjee, who founded Akhil Bharatiya Jana Sangh, BJP's earlier avatar, presented 'The Industrial Policy 1948' in Parliament that ushered India in the system of Mixed Economy. India's private sector under the British Raj was small in size, financially weak and incapable of spending large sums in the capital and employment-intensive projects. India's two largest companies were Indian Iron and Tata Steel. And, their combined steelmaking capacity was less than two million tonnes per annum. India's first and most relevant Industrial Policy had four features. They were: Strategic Industries (Public Sector) Basic / Key Industries (Public-cum-Private Sector), Important Industries (Public-cum-Private Sector) and Other Industries (Private and Co-operative Sector). Few will deny that the country's economy owes its current strength substantially to the Jana Sangh founder, who enjoyed the full support of Golwalker of RSS. The policy held good until the end of the Rajiv Gandhi era in 1989.

The RSS-affiliated Manch is particularly upset about the way the government is selling the basic industries under the public sector, just to cover annual budget deficits. PSEs are being sold cheaply even without concern of the nationality of prospective buyers. The government wants to raise some 150,000 crore rupees from the strategic sale of PSEs. Few domestic private industrial groups have surplus funds to take over such large assets. SJM is strongly opposed to such sales. The Sangh Parivar is openly resisting the privatisation of PSEs, especially those in strategic areas contributing substantially to the economy, such as Bharat Petroleum, SAIL, BHEL, NALCO, SCI, HAL, GRSE and Container Corporation, among others.

In a resolution passed at its national assembly in Haridwar, SJM said the government's proposed strategic disinvestment of PSEs was "against national interest …. A white paper is needed on the previous disinvestment of HPCL, where ONGC acquired the equity." On the strategic sale of BPCL, it said there "are rumours that the Saudi Aramco is eyeing these assets." "This is not only unacceptable but also dangerous. The asset created with the national sentiments and hard work shouldn't land upon the lap of the foreign oil companies who see these assets only as a statistic to swell their valuation," it said.

Recently, SJM led a successful campaign against India joining the Regional Comprehensive Economic Partnership (RCEP) free trade pact with ASEAN countries that would have opened a floodgate of imports further weakening the country's economy. Notably, Congress and Left parties had separately opposed India's joining RCEP. Many in SJM feel that the government is not serious about its 'Make in India' programme, originally championed by Mookerjee through his industrial policy initiatives and the public sector concept in basic and strategic industries. BJP's political adversaries such as Congress, Left parties and Trinamool Congress too feel strongly against the so-called 'strategic' sale of PSE assets. For the present, only RSS and its affiliate like SJM can make the government withhold its highly controversial PSE disinvestment exercise. Their resistance could produce a repeat of what happened five years ago when the Modi government had to partly surrender its reforms agenda, especially its Land Acquisition Bill, strongly opposed by Sangh Parivar.

Views expressed are strictly personal