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Privatisation and Labour Restructuring IF only this book was published, at least a couple of years ago, Gopal Ganesh would have become a celebrity. The author had embarked upon a project that simply presumes that the public sectors are necessarily inefficient and turning them into private enterprises will turn them into profit-making ventures. And that any resistance to this is borne out of the sense of insecurity in the minds of the leaders of the trade unions. And that, in fact, the fate of the workers will be better off than now if the industry is privatised and the union leaders are shown the door.
Gopal Ganesh, having been an integral part of the Disinvestment Commission, whose specific brief was to work out ways to divest the PSUs of their core character and sell a portion of the government’s share in them to the private investor and turn them into private enterprises in due course, could not have argued otherwise than celebrate the process. And suggest how best to execute the policy. The book, however, has come at a stage when myths are exploding. The bubble of economic progress, driven by the private enterprise and the irreversibility of that shift towards the market and privatisation as the panacea to economic stagnation, has now exploded. The book, hence, has come a bit too late and the author’s lack of academic rigour is evident. As for instance, the political and the economic context in which the idea of disinvestment and the shift to market principles from the erstwhile economic principle of Socialistic pattern could have placed the book in a context. That is missing and hence the book turns into a collection of narrative accounts of the various instances of disinvestment in India as well as in Sri Lanka along with some brief accounts of similar experience in Argentina. In the first place, the experience in Latin America can hardly be compared with that of Sri Lanka and more so in the case of India. This, however, is sought to be done in the book and without any suggestion to qualify that such comparisons are not in order. And hence it appears that the author simply took up reports on such studies that may have come to his notice during his tenure in the Disinvestment Commission (of which he was Member Secretary for five years) and turned the material into a Ph.D. thesis and subsequently into a book. The work, for instance, does not deal with the political economy of the Structural Adjustments Programme as prescribed by the Brettonwoods institutions in various countries that went through a crisis in their foreign exchange reserves and the fact that such prescriptions came in at a time when the quantum of global trade in goods and commodities went up in larger proportion than the quantum of production of goods and commodities. The transition of the GATT into the WTO during this period and its implications to the developing countries in terms of substantive fall in employment growth in the manufacturing sector as well as in agriculture are now the subject matter of a large number of studies and it is odd that the author has not cared to look into them. This, notwithstanding, the book is useful in so far as the meticulous manner in which the details of the divestment process are recorded and the positive and negative impact of those experiences are listed out. The author certainly has been able to present a case for the privatisation of public sector undertakings as the first step and leaving the task of restructuring the work force (retrenchment of workers in other words) to the private entrepreneur. That such a deal at the time of disinvesting in public enterprises has saved the process from being stalled by labour unrest is presented by the author without ambiguity. The author depends on the experience in Sri Lanka to buttress his case in this regard. The point, however, is that the divestment of the public sector to private entrepreneurs is not just a matter to be looked into from the perspective of a managerial expert. The fact that the Public Sector in India has not merely been a driving force to the economic development of the nation but also a means to settle political instability has been ignored by the author. Take for instance the case of the National Textile Corporation (NTC); the enterprise in the public sector was meant to prevent large-scale retrenchment of workers because the private entrepreneurs who ran those textile mills caused their ruin and imminent closure due to their failure to manage them efficiently. And the NTC mills, we know, contribute to a large share of the loss-making units in the Public Sector. And likewise, most other loss making units are those that were nationalised when they were on the verge of being shut down by the private entrepreneurs. The author has not taken this historical truth into account while embarking upon a study of this kind.
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Well. The presumption that
the public enterprises are marked by inefficiency and hence incur heavy
losses is a myth that has been propagated since the dawn of the
liberalisation era in July 1991. That was a political project of the
times and it did not really make a difference to the advocates of the
liberalisation-privatisation-globalisation process even when such facts
that a large number of PSUs made profits were mustered. The
establishment then conceded to classify the PSUs into categories and
some were called the navaratnas.