POST-INDEPENDENCE, towards achieving rapid economic progress, massive investments were made in the establishment of the public sector undertakings. The Industrial Policy Resolutions of 1948 and 1956 demarcated the areas of operations of public sector and private sector. There was a radical change in government`s policy towards the public sector in 1991, with the adoption of a new industrial policy where the role of public sector was drastically reduced. In the earlier industrial policies, seventeen industries were reserved exclusively for the public sector, while twelve other industries were to be progressively made private owned. However, in the industrial policy of 1991 only eight industries including defense production, atomic energy, coal and lignite, mineral oils, iron ore, manganese, gold and diamond, atomic minerals and railways been reserved for the public sector. It also provided that if need arises private sector units may also be permitted to enter these industries. The most important feature of the 1991 policy on public sector was the introduction of disinvestment and privatisation of public sector undertakings in the name of Corporate Restructuring.

The Ministry of Disinvestment was also established in 2001 during the Vajpayee regime which was converted into a Department under the Ministry of Finance by UPA-I in 2004. Importantly, the disinvestment process, which began in 1991-92 with the sale of minority stakes in some public sector undertakings, shifted focus to strategic sales during 1999-2000 to 2003-04. Hindustan Zinc, BALCO, Maruti were taken up post 2001. The challenge to the disinvestment of BALCO in the Supreme Court was disallowed with the Supreme Court holding that it was a prerogative of the Government to disinvest in the public sector undertakings and the workers had no say in the matter. The illusion that the Courts would protect the interests of the workers which would be most affected by disinvestment was effectively shattered. In 2004, UPA – I updated the disinvestment policy but due to the intervention of the Left allies and struggles of the working class there was a lull in disinvestment activities. But UPA-2 without Left parties, resumed disinvestment process. The adoption of the policy of liberalization, privatization and globalization as a part of economic stabilization and structural adjustment programme in 1991, on the dictates of the World Bank and IMF, saw disinvestment being initiated in public sector as a route of privatization resulting in the work force being thrown out on a large scale. This, in fact, is not just a jobless growth but job snatching growth. Modi has accelerated it beyond belief by effectively introducing the outright sale and closure of public sector undertakings including NHPC, Coal India, ONGC, etc. Strategic sectors like Railways and Defence have been opened up for 100% FDI.

The idea of the government is to generate revenues through selling out profit making public sector in the name of disinvestment and fund the budget, instead of taxing the corporate houses and the filthy rich. Thatcherite buzzword of government has no business to be in business is the Mantra of Modi government. NITI Aayog has suggested strategic sale, an euphemism for ruthless privatisation, of 20 PSUs and disinvestment in another 20 PSUs. The sale of Air India looks imminent. Privatisation of railways is another major step. Even though handing over trains and tracks may not be that immediate, definitely handing over stations, hospitals and workshops to private corporate houses, foreign companies and PPP (Public Private Partnership) mode appears to be quite imminent. Partial privatisation of manufacturing units of Defence follows suit.

Disinvestment of PSUs is the strategy of 90s but the latest, after 25 years of disinvestment, is the end game of handing over of government and public sector assets to private companies. The government has set a record disinvestment target of Rs. 72,500 crores this financial year. Out of which 15,000 crores is to come from strategic sales of handing over to private players, land is to be part of the deal and management control will remain with the private companies.

The companies in which the government proposes to sell stake and hand over management control include Dredging Corporation of India, Central Electronics, Scooters India, Hindustan Prefab and Pawan Hans. Others include Hindustan Latex, Goa Shipyard, Triveni Structurals and HEC. Also, the government has drawn a list of 11 fields of ONGC and four of Oil India, in which 60% participating interest would be auctioned to private players. Commercial coal mining will now be opened to private. The Centre is expected to open 10 coal blocks for private commercial mining bids in 2018—four blocks each in Odisha and Chhattisgarh and one each in Madhya Pradesh and Jharkhand. Next step is to encourage private players into infrastructure development.

There are also talks about privatisation of power distribution, which might come through with the amendment in the Electricity Act 2003. Privatisation of public sector banks appears to have been put on hold, at least, for now, with capital infusion so as to make it more attractive for sales and to save future buyers from the hardship of any immediate investment to make it viable. Often privatisation leads to a situation that PSUs further bleed to death. The telecom sector is a case in point. The leading four telecom operators in the country are private players, which have pushed government-run BSNL and MTNL to a corner.

But, only saving grace is the parliamentary elections in 2019. Whether Modi government will take the risk of antagonising crores of workers through privatisation in the run up to elections is the question mark. But, the blue print for wholesale privatisation is ready and the route is being cleared through large scale disinvestment and whichever be the new government, irrespective of its colours, is just to follow the same.