Bank Privatization & PSU Selloff | Why is the Govt in such a Rush? | DeshBhakt with Akash Banerjee - YouTube

Who are these protestors?

Are they demanding a temple?

Are they campaigning for an election?

Are they members of 'Tukde Tukde Gang'?

We expose them in this episode of TheDeshBhakt!

The protestors are PSU employees.

PSU extends to Public Sector Undertakings

These are companies owned by the Government

Employees of these companies are recruited after conducting competitive exams

For example BSNL, LIC and Bharat Petroleum

These companies not only ensure job security but also keep the economy running by contributing about 20% to the country's GDP

Recently, PSUs have been the subject of many controversies.

PSU companies have suffered losses, borrowed money, faced disinvestment and some have been shut down.

Interestingly, the Government which is responsible for running PSU companies is hell bent on destroying them.

You can argue that Government has no role in the bad condition of PSUs

After cutting Aarey trees and destroying institutions, PSU seems to be the new target of the Government

As usual, it is the tax-paying citizen who is suffering amidst all this.

Successive Governments have been systematically weakening PSUs

Both, the Congress and the BJP have fooled Government employees

Government is trying to privatize Government companies through systematic sale of shares or Disinvestment.

Recently, NITI Aayog's Rajiv Kumar said that the Government may privatise or shut 46 PSUs

Government has been trying to sell PSUs from many years.

Experts say that it is a good strategy to disinvest loss making or non-strategic PSUs

Both Congress and BJP Governments have treated PSUs badly

Some of India's PSUs were weakened on purpose

There are three main ways through which the Government is destroying its institutions.

1. Special Dividends

The Government enjoys some percentage of PSU's profits as dividends

The Government can refrain from taking the dividends and help the company increase its reserves.

Instead, the Government has pressurised oil companies and asked for surplus dividends resulting in the companies draining their cash reserves

According to a Economic Times report, the Government pressurised oil-companies to declare special dividends of Rs 4,570 crore

CITU's general secretary says that the Government is asking special dividends from companies to achieve fiscal deficit targets

This has resulted in companies depleting their cash reserves and they are not able to expand further.

If Demonitization fetched billions, then why is the Governement asking money from PSUs?

This strategy has costed ONGC 98% of their cash reserves.

ONGC is left with nothing but a gas chamber

2. Disinvestment

Government is selling its stake in PSU like never before.

Government thinks that selling loss-making PSUs will earn them money through disinvestment

Disinvestment target for FY20 is raised to 1,05,000 crores

This means that the Government is selling country's assets.

Interestingly, there is one party which claims to be the flagbearer of nationalism but has sold the most number of PSUs

BJP and Congress Government have already sold national assets worth 2.5 lakh crores in the last 26 years.

BJP is responsible for more than half of this (52%) amount in a mere 7 years of their tenure.

Now you decide, who is Nationalist?

The Government can justify disinvestment by saying that most PSUs are making losses

But can we not strengthen their finances instead of selling them?

Air India used to be one of the most profitable companies of the country.

The loss-making PSU is not even getting buyers today.

Although Congress can be blamed for Air India's mess but the BJP also had the responsibility of reviving it.

Air India is all set to face disinvestment in the coming days.

Air India is a loss-making firm but what about BPCL?

Government has proposed to sell the profit making firm.

A profit making oil company ensures financial security to the country and the Government wants to sell it.

The question is- 'Who will benefit if the Government sells an oil company?'

Third option- Pushing the company into losses.

It should not come as a surprise if a company headed by Sambit Patra gets into a crisis

ONGC was one of the richest companies of the country.

The Government forced ONGC to buy loss making firms like HPCL and GSPC

On top of that, additional special dividends resulted in ONGC losing its cash reserves by over 98%

Insurance companies usually make profitable deals.

But if the Government is hunting for money, even an insurance company needs to get insured.

The Government forced LIC to buy 51% stakes in debt-ridden IDBI

IDBI is currently under PCA and its management does not expect the bank to come out of it before 2020-21

LIC's solvency ratio is lowest in 10 years which makes the insurance company a risky venture.

But the Government is smothering one more company in order to save a dead one.

BSNL was killed using a unique formula

If you can't directly sell a company, you create unfavorable circumstances which will lead to its insolvency.

There were speculations that the Government is planning to sell BSNL

Telecom Secretary clarified that the Government has no such plans

The question we need to ask is- Why is BSNL in such a bad situaion?

BSNL made a profit of over 10,000 crores in 2004-05.

The same company reported a loss of about Rs. 8000 crores last year.

BSNL worker union's general secretary says that BSNL was not given 4G Spectrum licence on time.

Which essentially means that Government blocked licence to its own company

Needless to say, no one chose BSNL without 4G services.

Why was BSNL denied 4G licence? The question remains unanswered.

If you can't sell a profit making firm, you can try to rupture its financial stability.

HAL was prepping for a deal to manufacture Rafale aircrafts but the deal was dumped when Dassault chose Reliance over HAL.

HAL employees are going on indefinite strikes over low wages.

Today, BSNL, HAL and Air India do not have funds to pay employee salaries.

The Government is planning to privatize Defence, Railways and Coal Sectors too

These sectors have a significant stake in running our economy

Privatization of these PSUs will inevitably end all the Government employee benefits.

People who will get affected will resort to protest after that.

Just like Aarey protesters, PMC account holders and HAL employees are protesting.

We can't give you a simple Piyush Goyal type solution for this problem

But there are a few questions we need to ask.

Were PSUs given the autonomy they deserve?

Did we consider the Impact of Privatization?

Is PMO interfering in the working of PSUs?

Nobel winner Abhijit Banerjee believes that Government interference is weakening our institutions

Has the Government taken any steps to improve the state of these sinking PSUs?

Answers are hidden somewhere in the questions.

The Government should stop milking the PSUs. The situation might improve if PSUs are treated like national assets.

You dont get to know about the situation of PSUs because the news channels are not talking about it.