Wither India
With The National Monetization Pipeline
What is the
National Monetization Pipeline?
The government, and
particularly, the finance ministry has announced that a list of public assets
will be leased to the private investors for a period of time to raise Rs. 6
lakh crores over the next four years.
What Assets? Only
those assets which are already operational, will be leased out to the private
investors.
26,700 Kms highways worth Rs.1.6
Lakh (L) Crore (Cr); - 400 Railway stations and 150 trains (Rs.1.5 L. Cr); -
42,300 Circuit Kms of Power Transmission Lines (Rs.0.67 L. Cr); - 5,000 MW
Hydro, Solar and Wind Power Generation assets (Rs.0.32 L. Cr); - 8,000 Kms of
National Gas Pipelines (Rs.0.24 L. Cr); - 4,000 Kms Pipelines of IOC and HPCL
(Rs.0.22 L. Cr); BSNL and MTNL Towers (Rs.0.39 L. Cr); - 21 Airports and 31
Ports (Rs.0.34 L. Cr); 160 Coal Mining projects (Rs.0.32 L. Cr); and 2 Sport
Stadiums (Rs.0.11 L. Cr) etc. for various durations of lease. It is claimed
that the funds so generated will be invested in expanding infrastructure.
The assets in
creation, in the process of building up will not be included. These could
be considered to be leased out only when the building of these assets is
completed. The building up or completion of, or creation of assets has to
be done by the government.
We have already in
existence the assets which have been leased out, such as the airports. Adani
has been given the Mumbai Chhatrapati Shivaji airport, Thiruvananthapuram
airport for the purpose of operation. And Mundra port in Kutch which had
in one of its containers massive quantities of drugs coming from Afghanistan.
The leasing out of
the assets means that the ownership of the assets remains with the government
but they will remain at the disposal of the investors during the period of the
lease agreement. Once the lease period is over the assets will be handed
over back to the Government.
The investors will
pay the government lease amount for each of these assets. This amount may
not be the cost of the creation of the assets. This lease amount will
become an income for the government. The government would like to earn
about Rs. 5.96 lakh crore. As far as the investors are concerned, they
will run the assets, eg., the airport, and earn money for themselves. If
the government was running these assets, they would also earn the money for the
government. But the time the government would earn the money equivalent to the
lease amount, it will take several years. Leasing the assets will give
the government immediately this amount and investors will recover their
investment and their profit over a period of time.
The government says
by leasing the assets to the investors they will free the capital (investment)
stuck in these assets. The government will immediately get back about 14%
of the total investment in these assets from the lease. The government can
invest this lease amount to create new assets and infrastructure. In this
manner the National Monetization Pipeline (NMP) will boost the Indian
economy. It will generate new employment and new infrastructure.
Further the newly created infrastructure can be leased out to more investors by
the private capital leading to government further earning and investing in
creation of new assets and creating more employment leading to growth. This
pipeline will be a continuous process.
What are the fault
lines of this NMP?
1. First of all, we must understand that the assets
being offered for leasing have been created through the contribution of the
citizens, all of whom pay either direct or indirect taxes to the
government. The citizens have stakes in the management and operation of
these assets. They have elected a government to govern which means the
government and their agencies should operate these assets for the public
interest and not to be handed over to the private capital to generate profit for
themselves. The assets offered over the private investors are performing
assets which serve the people.
2. There is a big doubt if the private capital will
come forward to take the public assets on lease. There is a standing
offer to them of the sale of Air India. But there are no takers for this
airline. The buyers have to abide by some stringent conditions which keep
them away. Those who come forward to take the assets on lease will prefer
to take most profit-making assets, like airports, harbour and ports.
Finally, only two or three investors like Ambani and Adani will come
forward. This will lead to formation of monopoly and oligarchs.
3. The governments in the past have tried other
means to hand over the assets to the private capital through the schemes like
“Disinvestments”, “Public Private Partnership”. These have not worked
well. In the case of disinvestment, the government has sold the
profit-making assets for a song, resulting in handing over tax payers’ assets
to the capitalists. The Centaur hotel of Mumbai was sold at a very lowest
price. The buyer sold this hotel within a month making huge
profits. The new buyer is making a roaring business out of it.
Finally, it the public that have lost their wealth to the private capital.
4. The government will lease out to the private
capital assets built by the government from the taxpayers' money. When
these assets, like Airports, Railways, roads, ports and harbours go under the
control of the private capital. They will try to get maximum profit out
of it. When the private capital hands over these assets to the government
after the stipulated time we will not be able to know the condition in which
these assets will be returned.
“A farmer buys a
young healthy, milk yielding cow. He leases it out to a milkman for three
or four years. The milkman milks the cow and feeds less to make maximum
profit. After three or four years the farmer gets the cow back in a
miserable condition, an under nourished and low milk yielding cow.”
5. If these assets are leased to the cronies of the
government as it has happened in the case of airports it will result in
monopoly. If the private players (monopolists) charge the consumers high
consumer fees, then the consumer will suffer. Initially the consumers pay
to build these assets through their tax money and the same assets land in the
hands of the private capital who further exploits the consumer.
6. In the year 1991, Narasimha government along with
Dr. Manmohan Singh liberalized the Indian Economy. The economy was
liberalized, opened to the world market, for private investment. The
National Monetization Pipeline is part of the same privatization
programme. This reform has seen a sea
change in the Indian economy. We have a lot of foreign investors in the
country. There was indeed high growth. But on the other hand, we have seen a lot of
petty producers pushed out of production. The industrial growth has led
to the forcible displacement of peasants from their land. If we take an
example of tribal population then we will see that their land holding which had
been sustaining their families have been forcibly evacuated from their land and
their lands have been taken over by Adani and Vedantas to explore minerals.
From 1991 to 2011 the number of cultivators has fallen by 15 million.
These people have been reduced to wage labourers or keep migrating to the
cities in search of non-existing employment. Of course, the economy has
seen tremendous growth. We have noticed that the GDP growth and growth in
employment is inversely related. We can see the way auto industries are
organized. The high automation has improved the quality of cars but it
has not created proportionately equal employment. In many cases it has displaced
the workers.
8. The reform in the labour laws have encouraged
foreign and domestic investment leading to higher industrialization. But
it has reduced the bargaining power of the workers. There is a widespread
practice of contract labour. Usually the semiskilled workers, as and when
needed by the industries, were hired through the contractors. But now
even the highly skilled workers are hired through contract labour.
9.
The three farm laws which the Modi government has
introduced will reduce the farmers to the condition of contract farmers.
The procurement and farm market will be controlled by Ambani and Adani who have
already built massive store houses to store food grains. Farmers will
become mere extensions of the corporates. These corporations can even create
artificial famine by hoarding food grains, forcing the poor to starve.
The real issue we would like to address here is
the “Paradigm of development”?
The state wants to
transfer the wealth of the society to the wealthy capital owners and reduce the
rest of humanity into mere wage labourers who would have to rely on the wages,
having no share in the wealth of the society. The society to be divided into a
few oligarchs and the rest of the people into wage labourers having no stake in
the society. By allowing these oligarchs to own the society’s wealth
these oligarchs will rule the state. This will make the government to
rule the nation for these oligarchs. The wage labourers may have houses,
three square meals, health care and education but they will have no share in
the society and the capital created from their taxes. The meaning of
their lives will be reduced to eternally wage labourers. The government is introducing a new type of
citizenship, bereft of all rights of the citizens. In India, it is not only the pace of growth
that will impress people, but also the pace of their inclusion in it. Those who
are being left behind, including tribals, do not want to be mere passive
beneficiaries of state handouts and corporate philanthropy. They want to be
respected, earning their own incomes and growing their own wealth.
- Citizenship as wage labourers for the capital: If after monetizing the national assets the government may invest the proceeds for creation of new assets. It will give rise to employment opportunities. But who will be the end beneficiary of this? This investment will be to create wealth for the private capital. The lives of the wage labourers always hang on the temporary strings. When the string becomes weak the life becomes precarious and when the string breaks the labourers fall flat on the ground. We have experienced this during the pandemic. The labourers were the most affected population of the society. There were a huge number of people who lost their jobs; the miseries of the migrant labourers have remained on the TV screens long enough to be forgotten. While the working class was pushed into the depth of poverty and suffering the private capital owners’ wealth grew in multiples.
- The state as a repressive machinery. To prevent opposition or revolt from the toiling masses the state has assumed a greater repressive nature, abolishing the right to protest, frequently using draconian laws like UAPA, sedition that goes to deprive the rights of citizenship for people who dare to think and express their opinion. Reform in the trade union laws which deprive the right of the workers to bargain, demand for fair wages, security of employment.
- A farmer grazing his cattle in the land near the National highway no 7 says, “life has become hard for us because our space has been taken away from us. This highway which came up right in front of our eyes has taken away so many of our cattle, sheep and goats. We used to be afraid of tigers which would sometimes take away our cattle. The tigers have gone and vultures like these highways have come. Nowadays these highways have been fenced, preventing us from entering the highway roads. We cannot cross these roads. Our bullock cart cannot enter the road.”
Nation building is primarily making all citizens
feel that this nation belongs to them; that they have a share in the wealth of
the nation.
