The central government is on a privatization spree. Several airports are going into private hands, generally in the private-public-partnership (PPP) mode, and some of the nationalized banks too might soon end up in private hands. Congress leader Rahul Gandhi’s criticism that the Modi government is selling off precious state-owned enterprises is true, but the obvious reason is also that government is unable to run these companies or business units or banks as they should be run.
Almost every public sector undertaking is turning into a white elephant, draining the national resources and failing to register profits. They unfailingly report losses year after year. Even granted that entities like the Railways have a social obligation to meet, the real story is that “business is not the government’s business.” A mix of bureaucrats trained only to administer and politicians deeply into corruption is proving to be the undoing of the public sector. Together, they kill enterprise.
There are arguments for and against socialist systems, and of state running businesses. The experience of Communist governments in running the nations and businesses in the erstwhile USSR has been a sad tale. China borrowed ideas from capitalism, like its adoption of a market economy, and this proved to be a great success. Most socialist and communist countries that laid emphasis on keeping the private sector at bay ended up as big losers. Indira Gandhi nationalized major private banks in the country in the 1970s, and projected this as a progressive step. Nationalised banks, it was promised, would serve the people’s interests more by way of advancing loans on easier terms. The idea turned on its head in a matter of a few decades. The UPA period saw massive loot. The Modi era failed to stem the rot. Business sharks used their influence with bank managers and politicians in power to take huge loans without sufficient security cover and scooted from the scene. The scenario is worsening.
The airport sector is now up for grabs. When even tiny nations in the neighbourhood like Singapore and Malaysia came up with smart and glitzy airports in the 1990s, India still failed to wake up. Indian airports began seeing improvements only after the turn of the century; and there were reports of huge swindling of funds in the building of new airports; the CAG made a specific mention of Delhi airport. The PPP model, with a mix of private and public funds, is seen as the way forward. There will be more of accountability; and less of loot. As of now public or government property is now up for open loot.
