Privatisation Phase 2: Government declares monopoly bourgeoisie’s interests as supreme

In the last week of December, following an extraordinary meeting of the Cabinet Committee on Disinvestment, it was announced that the remaining 26% shares of Modern Foods, currently held by the Government of India, will be handed over to Hindustan Lever Limited (HLL) in January 2002, a year ahead of schedule. According to officials, this was "to send a clear signal that it would exit from companies which it perceives as being well-run by the strategic partner after the first phase of any strategic sale", according to officials.

When the government of India launched privatisation, it argued that PSU’s were "inefficiently run" and were incurring great losses. It argued that government was sinking public money in these enterprises, and it should withdraw from these enterprises. It argued that government was corrupt and inefficient and should withdraw from all activity that was not in the "strategic interest of India". It was left delightfully vague as to what was this "strategic interest".

However, when the first phase of privatisation began, two things became clear. Precisely the companies which were profit-making in the capitalist sense or were capable of making profits in the capitalist sense were offered for sale. Secondly, the unproductive expenditure on the parasitical state apparatus, on militarisation, interest payments, as well as handouts to the capitalists have been greatly increasing. In other words, the main reason for selling off PSU’s was because Indian and foreign monopolies were eager to grab these enterprises, built up at great cost, at throwaway prices, and not out of concern at waste of public money. That is, the underlying reason behind privatisation was the demand of the big bourgeoisie and imperialism that the Indian state hand over all the resources of society for plunder and provide all assistance to the capitalist class in this plunder. The "strategic interest of India" was the interest of the Indian big bourgeoisie, nothing else.

Now the government is selling the remaining shares of Modern Foods to its partner HLL because "it perceives it as being well-run by the strategic partner". What does the government mean when it says Modern Foods is now "well run", as opposed to the earlier "inefficiency"? We do not know whether the balance sheets of MFIL have been scrutinised by Arun Shourie and Company. What we do know is that HLL referred Modern Foods to the Board of Industrial and Financial Reconstruction (BIFR) last year, and the BIFR had not yet had its first meeting with the Modern Food officials when the Cabinet Committee on Disinvestment gave the clean chit to HLL! It is significant that a company whose management refers it to the BIFR because it has lost 50% of its net worth in the past 4 years(2 of which were under HLL management), has been declared as well-run by the government! In other words, the government wants to push the BIFR to give a clean chit to the demands of the HLL for "restructuring" (which means closures of various units, retrenchment, etc) and simultaneously declare it "well-run". A question of course arises. If Modern Foods is so "well-run", why is the government desperate to sell off shares whose value are bound to increase over the next year, a year ahead of schedule? Why is it giving "daan" to HLL?

Meanwhile, according to media reports, the ALC(Central) has issued a labour license to Modern Foods. This has been done when cases are pending before the Labour Commission Enforcement Cell of Delhi Government on the practice of hiring contract labour by Modern Foods while keeping regular workers as well as casual workers off duty, and the practise of sub-contracting bread production to other private sweat shops. This has also been done after the Supreme Court decision on SAIL. Supreme Court clearly ruled that only Public Sector Companies come under the purview of the Union Labour Ministry and all private sector companies come under the purview of state labour boards! In other words, when it suits the big bourgeoisie, Modern Foods becomes a Public Sector Company even though its controlling share is held by HLL. However, when workers raise issues related to Modern Foods with the Union government, as the Modern Food Industries Employees Union has been consistently doing, they are told it has been privatised and they should deal with the problems with the appropriate state governments and departments! What we are witnessing in the second phase of privatisation is a Union Government bending over backwards to fulfill the greed of HLL to maximise the exploitation of workers through contract labour to make it even more "well run"...

Taken together, what Arun Shourie and his men mean by a "company being well run" comes through as follows. It must have a track record of maximising profits through acquisition of companies, retrenchment and closures, and taking over of brand names after jettisoning workers. It must close down plants and threaten workers with retrenchment and VRS. It must resort to hiring contract labour and subcontracting production. Savage capitalist exploitation to ensure maximum profits for the monopoly is the meaning of "well-run".

The Indian big bourgeoisie and foreign imperialism are demanding that the Indian state remove all restrictions on their ability to exploit the land, natural resources and the labour of the Indian people. They are demanding that the Indian state ensure the complete subordination of the whole of society to the interests of the big bourgeoisie and imperialism. They are demanding that government openly declare that the interests of capitalists override the interests of society.


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Defeat Privatisation    Feb 1-15 2002    Political-Economy    Revisionism    Privatisation    Economy    

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