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In August 2021 the NDA government unveiled its grand design to put chunks of the nation’s public assets on lease for private profits. The plan has been named the National Monetization Pipeline, the idea being, to lease or monetise infrastructural assets ranging from roads, railways, ports, telecom, gas, power and so on, to raise 6 lakh crore over the course of four years. The Finance Ministry has gone out of its way to appeal to private players that since the pipeline only lays out brownfield assets, there would not be risks or logjams for capital pertaining to land acquisition or building of fresh assets. The top 5 sectors (by estimated value) capture ~83% of the aggregate pipeline value over four years from 2022-2025. These top 5 sectors include: Roads (27%) followed by Railways (25%), Power (15%), oil & gas pipelines (8%) and Telecom (6%).

The plan has been celebrated and ushered with open arms in certain circles. One called it a “bold and audacious” move, akin to an “invitation to a party” for private players. A former Secretary of the Road Transport and Highways Ministry in fact said that the government really had no other option as it either could take the “unpalatable” step of printing more money or cut back on its plans. The only way out for generating resources, he believed, was to monetise public assets. He in fact lamented that it has taken this long.

But then there are many who have resisted the euphoria and have raised alarm. They have expressed their misgivings about the entire plan and for good reasons. By opening up chunks of public assets for a private “party” wherein corporates are invited to bet on the assets they liked, are we going back to another Company Raj on our 75th year of freedom? 

While an over-complacent government was largely missing in action when the tragic second wave swept through the country, in fact has used the pandemic as its pretext to justify raising necessary resources through monetization. 

Far from drawing the right lessons from the pandemic, the government in fact has insisted on relying on its neoliberal handbook, i.e., limited state expenditure on social welfare and a further (rather fundamentalist) reliance on the market to lift us out of the crisis. Those are the same prescription that has wreaked havoc by putting millions across the globe at the mercy of unaffordable private healthcare, dwindling social security and precarious jobs. 

This is why the monetization plan cannot be understood in isolation and much rather is the continuation, in a more reckless manner, of the policies of privatization that were set on foot since 1991. It was said that the Nehruvian welfare state model had outlived its utility for the economy and it was said that liberalization was an idea whose time had come – either adapt or perish. It was said this was necessary to remove the limits (or regulations) and unleash the aspirational drive towards individual and in turn national growth. The crucial role that the PSUs played in nation building have been erased, downplayed or even tarnished over the years. What has also been sidelined is the question of affordability of services and their accessibility in remotest areas which has only been possible because PSUs have operated beyond the pale of profit motive alone. By its very presence in each sphere – from steel to higher education, from health to airways – it has had the effect of setting the benchmark for even the private sector to operate. It has been able to counterbalance (through regulations) the exigencies of an unbridled market and risks of monopolies. Instead what has been the trend is the handing over of public sector units to private hands and a withdrawal of the state. 

This has been undertaken in several phases. While from 1990 to 2000 disinvestment has been happening largely in the form of sale of minority shares, from 1999 to 2004 under NDA 1 this took the form of “strategic sale”. From 2004 onwards the trend has been to list large, profitable CPSEs on domestic stock exchanges. What were measured steps, have now turned into a cascading torrent of privatization, monetization and sale of PSUs handing them over to big business. So much so that the Prime Minister today openly says that “government has no business to be in business”. In this latest and more brazen phase we see favouring of a few chosen corporate houses to hand over public assets. Monetization being the crudest manifestation wherein assets built with public money are to be handed over for pittance to private players on “lease”. While much of this is done in the name of “efficiency” of the private sector, the catastrophic failures of the private sector (say for example the YES Bank debacle) are carefully hidden away from public scrutiny. 

What is worse is that the fate of the national assets built over seventy years with people’s money was decided with no participation of the people or even their representatives in the parliament. None were consulted, there was no public debate. Not even in the media. We hardly find any critical evaluation of the pipeline in our airtime. All we see mostly are positive stories – of its potential to raise employment, of “efficient utilisation”, of its potential contribution to growth and so on. Public is either left confused, or left in the dark as to what it entails for them, for their pocket and their lives. Particularly in a country like India, where inequality – both wealth and caste-based – ought to be a deciding factor for any public policy, more discussion was needed to assess the impact of monetization of public assets. 

Is it constitutionally mandatory to discuss it in the parliament? No. But as Praveen Chakrabarty, from the opposition ranks said, procedurally, morally, ethically and politically it was imperative that before launching it in a press conference, such a decision should have been discussed not just inside the parliament but also outside. Legally when it comes to matters of budget whether expenditure or revenue, it is the prerogative of the parliament to discuss such matters, after all that is what the parliament is there for, that is why the union budget is presented. It is rather unfortunate that not even the public sector employees whose fate are going to be directly affected by such a decision were consulted. 

But then this has become quite the norm today says Mr. Chakrabarty. Even the decision of huge corporate tax cuts was never discussed in the parliament. It was announced just six months after the budget was presented simply in a press conference just on the eve of Modi’s US visit for the “Howdy Modi” rally in 2019! The finance ministry itself said that it would cost the government exchequer 1.5 lakh crores per year! And today, with the monetization plan, the Finance Minister intends to raise the exact amount per year by putting public assets on the block, yet again with no debate or discussion about its ramifications for the country!  

The purpose of the report is to compile some of the apprehensions, misgivings, criticisms and concerns that have been raised about the implications of such a pipeline, for the people, particularly for the marginalised; and to assess where it stands with respect to our constitution obligations. The report is not for a deep dive into the points, but is only an attempt to put together the varied range of opinions that have called into question the pipeline as an unsound public policy. 

Read the full report here: NMP: A Critical Evaluation 

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