Skip to main content

GoI selling PSUs to 'dubious' investors amidst rising inequality, unemployment

By Ashish Kajla* 

In its reckless privatisation drive, the Government of India (GoI) is selling the Central Electronics Limited (CEL) to Nandal Finance & Leasing Private Limited, a Non-Banking Financial Corporation (NBFC) with a dubious record, owned by a furniture company, with less than 10 employees and without any prior domain experience. CEL, a company with a marvellous track record that had a profit of Rs 136 crore in FY21 alone, is being sold at a throwaway price of Rs 210 crore.
The market value of the company’s land is Rs 440 crore, and it has orders of more than Rs 1500 crore with pending dues worth Rs 132 crore from government agencies. While the matter is sub-judice now, after the objections from CEL employees union in Delhi High court, central government put on hold the letter of intent for privatisation of the CEL.
As announced in the budget previous year, the government is going ahead with the IPO (initial public offer) of the Life Corporation of India (LIC). LIC in itself is a unique institution globally where only 5% of total profits go to the government (whole owner of LIC) and rest 95% go to policy-holders as per its legal mandate.
This IPO will change the overall life insurance market in the country, which is being done to make space for private life insurance players and to let private investors (including foreign investors) make money from the humongous LIC. This will lead to a decrease in small premium policies, leaving a negative effect on lower middle class and marginalised populations.
While the government claims that it will ensure more accountability and transparency, LIC’s track record says otherwise – the largest life insurer in India with more than 1 lakh employees, 10 lakh+ active agents, total assets under management worth Rs 38 lakh crore, Gross Written Premium (GWP) with a market share of 64.1 per cent, New Business Premium (NBP) with a market share of 66.2 per cent, number of individual policies issued with a market share of 74.6 per cent, number of group policies issue with a market share of 81.1 per cent and 98.62% claim settlement ratio for FY 2021.
Although the government has stated that it will continue to hold a controlling stake of at least 51%, the dilution of its stake in LIC is bound to allow private interests, including foreign investors, to have a significant say in decision-making of LIC.
The State Bank of India made a tie-up for co-lending with Adani Capital, to increase the spread of credit to agricultural activities, claimed both groups. Much of the focus has been on the largest bank of the country tying up with a much smaller and much less experienced Adani Capital for disbursing money. There have been similar tie-ups in the recent years not just with state bank but with many other banks with NBFCs.
This also follows the pattern of diluting the Priority Sector Lending (PSL) over the years. With increasingly the NBFCs stepping in to disbursal of agricultural loans the number of direct credit to farmers have declined. This move uses banks to further aid corporate capture of rural and agricultural credit. It also helps these corporate companies to access the data of the bank and accounts.
Though the government never stops praising and claiming the positive outcomes of mega bank mergers, the regulator assessment says otherwise. The Reserve Bank of India (RBI), in its Financial Stability Report, said the merged banks are more-risky than the non-merged public banks.
Two reports, one from Inequality Labs and another by Oxfam, brought out the stark inequality levels in the country, highlighting the top richest people doubling their wealth during the pandemic. 
The World Inequality Lab Report 2021 released by the end of last year noted that while the top 10% and top 1% hold respectively 57% and 22% of total national income, the bottom 50% share has gone down to 13%. The figures for wealth inequality are starker.
As per the estimates of the inequality database, the bottom 50%, own only 6% of the total wealth. The middle class own only 29.5% of the total while the top 10% own 65% and the top 1% own 33% of the total wealth in India. As per the Oxfam report "Inequality Kills", released in January 2022, while 84% of Indian households saw their income shrinking during the pandemic, the wealth of India’s richest families reach record highs in 2021 with the number of billionaire families increasing from 102 to 142 over the course of 2021.
The report said that the richest 98 Indians own the same wealth as the bottom 552 million people! It claimed that a 4% tax on the wealth of 98 billionaires can fund the mid-day meal programme for 17 years. 
Women collectively lost Rs 59.11 lakh crore in earnings in 2020, with 1.3 crore fewer women at work now than in 2019
A 1% wealth tax would be enough to take care of the total expenditure for school education and literacy, or fund the government health insurance scheme Ayushman Bharat for more than seven years. The report highlighted the gender and caste dimensions of inequality in India.
Women collectively lost Rs 59.11 lakh crore ($800 billion) in earnings in 2020, with 1.3 crore fewer women at work now than in 2019, said Amitabh Beher. In the Oxfam India Inequality Report 2021 titled India’s Unequal Healthcare Story, in India an average upper-caste woman can expect to live 15 years longer than a low-caste Dalit woman.
Recent survey conducted by PRICE shows the annual income of the poorest 20% of Indian households, constantly rising since 1995, plunged 53% in the pandemic year 2020-21 from their levels in 2015-16. In the same five-year period, the richest 20% saw their annual household income grow 39% reflecting the sharp contrast Covid’s economic impact has had on the bottom of the pyramid and the top.
According to the the Centre for Monitoring Indian Economy (CMIE), the urban unemployment rate is 8.51 per cent and the rural unemployment rate is 6.74 per cent. But this hides more than it shows as many are disguising their unemployment. What is far more worrying is the declining labour participation rate. 
CMIE data shows that the labour force participation has fallen from 43 per cent to 38 per cent. This is indicative of the number of people who are not getting a job and hence have stopped looking.
Retail inflation rate rose to a six-month high of 5.59 per cent in December, primarily due to increase in food prices, according to data released by the National Statistical Office (NSO). In November, inflation based on wholesale prices touched a record high of 14.2% which was the highest in the last several decades.
For the upcoming budget next week, listen to the demands that people are expecting the union government must address, given that the last two years of pandemic and mishandling by the government have left Indian economy in shambles. 
The worst affected sections – lower income groups, small and medium enterprises and informal sector – need direct support from the government to survive the impact of the pandemic. State governments are financially weak and need more than what center owes them from previous pending GST shares.
---
*Source: Centre for Financial Accountability

Comments

TRENDING

Tracing roots of Hindutva Zionism: cannon fodder for 'warped' nationalist pretensions

By Shamsul Islam*  Those who believe in a world free of hegemonic ethno-nationalism, racism, religious bigotry and hatred have rightly taken note of Zionism and its ally Christian Zionism, major perpetrators of ethnic cleansing of ‘Others’. However, the civilized world with its core belief in multi-culturalism and peaceful co-existence is oblivious to a no less dangerous threat to the present human civilization: the Hindutva Zionism. As the term reads it is part of the Hindutva world-view which stands for an exclusive Hindu India minus Muslims and Christians. The other religions like Sikhism, Buddhism, and Jainism will have no independent status but treated as part of Hinduism. The Rashtriya Swayamsevak Sangh (RSS; National Volunteer Organization) is the most prominent flag-bearer of the Hindutva politics whose cadres presently rule India, the largest democracy in the world. RSS was founded by Keshav Baliram Hedgewar (1889-1940) in 1925 who was disillusioned with the Indian freedom st

Regional parties, anti-Congress progressives, civil society groups 'joining' Bharat Jodo

By Harshavardhan Purandare, Sandeep Pandey*  The Congress party declared Bharat Chhodo (Quit India) movement against the British regime in 1942. The Congress party has now launched a movement Bharat Jodo (Connecting and Uniting India) against the Modi regime in 2022. Indian people have had a journey of 80 years since Mahatma Gandhi gave that Quit India call to the British and we have to agree that we stand most divided in our modern history when Rahul Gandhi is giving this Bharat Jodo call to the nation. And back then, Congress was a thriving idealistic political movement against the British rulers and now it is an ever weakening political organization electorally defeated several times. However, it is India at stake, not just the Congress party. That is why so many regional political parties, civil society organizations, traditional anti-Congress progressive forces like socialists and communists, intellectuals and civil servants have declared their support and are proactively partici

Shocking? No Covid vaccine trials conducted on pregnant, lactating women: RTI reply

By Rosamma Thomas*  A Right to Information applicant who sought details of safety trials conducted in India on pregnant and lactating women for three Covid vaccines in use in India – Covishield, Covaxin and ZyCov-D -- was shocked to learn from the Central Drugs Standard Control Organization (CDSCO) that Serum Institute, manufacturer of Covishield, and Cadila Healthcare, manufacturer of the ZyCov-D vaccine, had not sought permission for such trials.  Bharat Biotech, manufacturer of Covaxin, had sought permission for trial on pregnant women and later withdrawn its application. This response , provided after the applicant was initially unsatisfied with the response and went in appeal, is from the joint drugs controller, CDSCO. It was dated September 13, 2022. One researcher closely following the vaccine rollout, however, is of the opinion that the lack of a trial on pregnant and lactating women is a blessing; potential trial participants and their unborn babies thus escaped harm. Aruna Ro

Grave error? Scholar blames ex-Gujarat babu for anti-Christian riots 'citing fake report'

By Rajiv Shah  A few days back, I received a message from one of the finest former Gujarat government bureaucrats, PG Ramrakhiani, a 1964 batch IAS official, who retired in November 2000. I would often interact with him in 1997-99, even later, after I was sent to Gandhinagar as a Times of India man to cover Sachivalaya. Those were turbulent times. Shankarsinh Vaghela was the Gujarat chief minister, under attack from two sides – from the BJP, which he had left to form a separate breakaway party, Rashtriya Janata Party (RJP), one one hand, and the Congress, which was supporting him from outside, on the other. Ramrakhiani, in his message, referred to the book authored by Ghanshyam Shah and Jan Breman, both top-notch scholars who have known Gujarat in and out. Called “Gujarat, Cradle and Harbinger of Identity Politics: India’s Injurious Frame of Communalism”, I reviewed the book in January 2022.  It claims that Muslims in Gujarat have been turned into “new untouchables”, thanks to the Hin

Rajasthan cops 'halt' Gujarat Dalit women's rally: homage to untouchability victim boy

By Our Representative  In a surprise move, the Rajasthan police stopped a Dalit women's rally from Gujarat on the borders after it crossed Gujarat alleging that it would "disturb peace" in village Surana, Jalore district, where the gruesome incident of death of a Dalit boy took place on August 13 after he was brutally beaten up by his teacher on touching the drinking water pot. Sources said, while the Gujarat government had "no objection" in allowing the rally, which originated from the Dalit Shakti Kendra (DSK), an empowerment-cut-technical institute for teens founded by human rights leader Martin Macwan, on September 24 morning, the Rajasthan police stopped it for two and a half hours before allowing it to proceed to Surana. The decision to take out a women's rally was taken at a DSK meeting on September 5 following a condolence meeting of the NGO Navsarjan Trust, also founded by Macwan, activists committed to work against caste-based discrimination, orga

Excess to cheetah in Kuno to increase 'woes' of local people, 'disturb' wildlife balance

Bharat Dogra*  The release of eight cheetahs into the Kuno National Park ( Madhya Pradesh) by Prime Minister Narendra Modi on September 17, although accompanied by a media blitz, has raised several questions. The animals were flown from Namibia to Gwalior and from there they were taken to the release site in a helicopter. Official sources have stated that this is the first time a large carnivorous species has been moved across continents for establishing a new population. This first release will be followed by others under this project. However, precisely for this reason, it is important to be cautious because if such translocations have been generally avoided in the past, there may have been reasons for this and at the same time we do not have much learning experiences from the past. The Cheetah became extinct in India in 1952, although this very fast moving animal is still remembered in the folklore of many areas. Hence the first impulse is to say that trying to introduce and revive

Introducing non-native cheetahs is 'not equivalent' to restoring pride in the nation

By Bappaditya Mukhopadhyay*  The Cheetahs from the African continent has finally been introduced to India by the Indian Prime Minister on his 72nd birthday. The process had started with the previous Government in 2009. However, the Supreme Court clearance was pending owing to the objection by the National Tiger Conservation Authority (NTCA) plea to reintroduce cheetahs. Finally the clearance was obtained in January 2020 and thereafter Kuno National Park (KNP) was chosen for the reintroduction of first set of Southeast African Cheetahs. In the near future, depending upon the success story of the current reintroduction, more cheetahs from South Africa may also be introduced. This exercise has generated a lot of interest among various stakeholders with opinions on both sides galore. It is important to pose some questions that surround the whole exercise. Let us evaluate some of these arguments. The first set of arguments are quite detached from the issues of conservation as they most

'Military diplomacy': US praises Bangladesh Army for leadership role in UN operations

By Kamal Uddin Mazumder* As the Indo-Pacific region represents the world’s economic and strategic center of gravity, the Indian Ocean today is becoming the centerpiece of all geo-strategic play. Cooperation in the region is crucial to implementing the international community’s global agenda, including achieving the UN’s Sustainable Development Goals. Major powers like the US have enhanced and deepened their strategic engagement and leadership roles with countries in the region. The Indo-Pacific Army Management Seminar, or IPAMS, is a U.S. Army Pacific (USARPAC) initiated conference that is aimed at facilitating and enhancing interactions among the armies of the Indo-Pacific region. This year's 46th Indo-Pacific Armies Management Seminar (IPAMS)-2022, co-hosted by the Bangladesh Army and US Army Pacific (USARPAC), concluded in Dhaka. The objective of IPAMS is to promote peace and stability in the region through mutual understanding, dialogue, and friendship. It is the largest confer

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Older than Delhi, no other school may have witnessed so many vicissitudes as this one

By Firoz Bakht Ahmed*  Behind every book there is a writer or writers. Are the books written for the personal gratification of authors? Is the purpose utilitarian, educational or to gain public ovation? There are writers who publish books because they are inspired by a purely disinterested and fair-minded pursuit of knowledge and to clarify the issues that agitate them and society. The book under discussion   is a masterstroke on the life and times of not only an institution at Ajmeri Gate, Delhi — Anglo Arabic School — but about the complex relationship between the school and the cajoled Muslim community. Just while you are at Ajmeri Gate, supposedly, the border of Old and New Delhi, barely a few meters from the cacophony and the chaos outside the New Delhi railway station, lies an island of serenity — a school much older than New Delhi, with a wholesale machine tools market on its West, a road leading to Rajiv Chowk (Connaught Place) on the East and colourful confusion of rickshaws,