Anand Teltumbde, a professor and writer, is currently incarcerated in the Taloja prison in Maharashtra, under the Unlawful Activities (Prevention) Act. He is awaiting trial in what is broadly termed the Bhima Koregaon case.
The ongoing debate on the Narendra Modi government’s programme to privatise public sector enterprises, or PSEs, has a certain ring of déjà vu. The proponents of privatisation argue, in support of the government, that private sector has always been more efficient than the public sector. Unbeknownst to them, this argument in its logical extension might lead to a preposterous but valid question: Why not privatise the government itself?
Exemplifying their point, they often say that the United States, which strongly favoured the private sector, grew into a global economic power, whereas the United Kingdom, which favoured the public sector, was driven to bankruptcy by the late 1980s. They conveniently forget that capitalism (read: private capitalism), pushed to its death bed by the great depression of 1929, was rescued by the Keynesian prescription of public investment. This prescription has been largely instrumental for the genesis and spread of public sector across the world. This was brought into disrepute by neoliberal economists only beginning in the 1980s.
Likewise, it is a fact India’s Nehruvian tryst with socialism emphasised the commanding role of the public sector in the mixed economy and the licence raj that thrived in its wake. And so, when India began to liberalise in 1980s, the private sector simply zoomed and overtook the public sector in performance. But even in this bland reading of history, one needs to remember that it was not as much Nehru, as it was the Bombay Plan of 1944, prepared by the eight leading capitalists of the country at the time, which proposed huge public investment in basic industries. Politically, the workings of this plan served as a socialist rhetoric for the then government. When one reads about economies of Russia and China “taking off” after they privatised their PSEs, one should remember that their privatisation success was also due to the infrastructure created by their PSEs. Therefore, such superficial presentation of historical data sans analysis may win the argument but would not help us grasp its true import.
It may be said as an axiom, that an enterprise, if left unencumbered from every regulation and control, will surely be more efficient than the one shackled by them. This would explain the seemingly higher efficiency of the private sector than that of the public sector. But when one reels off selective data on performance to show the purported superiority of the private sector, then one must also account for various tax and non-tax exemptions routinely granted to it, not to mention the huge Non-Performing Assets of the PSU banks, created in large part by private debtors.