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A left hook for the UPA

Warning against 'free-market' policies

PRAFUL BIDWAI writes from New Delhi
***The UPA/Congress must rethink beyond BHEL. The Congress has much to lose by breaking its alliance with the Left. The next Assembly elections will be testing for the Congress. It can ill-afford to get discredited among the people. The voter punished the NDA for claiming that "India is Shining." It will be truly tragic if the UPA attracts public anger within one year in office -- for claiming everything is hunky-dory.***
WITHIN a year, the Left's honeymoon with the United Progressive Alliance has ended. That's the meaning of the decision of the four parties, including the CPM and CPI, to stop attending UPA-Left Coordination Committee meetings.
The Left's withdrawal is not "shadow-boxing," to be ended after a shoddy face-saving compromise, as in Mr L.K. Advani's sordid resignation drama. It seems a well-considered decision, based on policy-level differences.
The Left's walkout won't immediately destabilise the government -whatever happens to BHEL. The Left will generally support the UPA, but not all its policies. It's only too aware that the UPA's collapse could help the communal, crisis-ridden BJP.
The Left had sounded numerous warnings about the UPA's economic priorities, which have strayed from the National Common Minimum Programme (NCMP), especially its pro-people measures
like the promised Employment Guarantee Act and increased social expenditures.
The Left legitimately demanded their implementation. The UPA ignored its pleas. At times, it deceptively claimed the Left had been consulted on controversial decisions!
The last straw was the decision to divest 10 percent of the shares of Bharat Heavy Electricals Ltd., a Navratna public sector undertaking (PSU), and a world-class high-
technology company. The Left proposed alternative means of raising the same amount. The UPA ignored it.
BHEL's divestment violates the NCMP's commitment "to a strong and effective public sector" and to retaining "existing Navaratna companies in the public sector while these raise resources from capital market."
Such divestment is profoundly irrational. BHEL isn't just another PSU. It has 90,000 MW of generating capacity to its credit. BHEL's turnover (a solid Rs 10,336 crores) has increased 2½ times over 10 years. It has proved globally competitive against world giants of the electricity-generation equipment
industry like Siemens, General Electric, and Alsthom.
BHEL has warded off attempts by multinational rivals to lure away its engineers with salaries that are six times higher! Over the past decade, BHEL has contributed Rs 11,700 crores to the treasury in taxes. It routinely pays dividends like 40 and 80 percent!
If anything, there is a case for launching BHEL as a truly global corporation, and granting it autonomy to tap the market, fix salaries,
choose technologies, etc. This would produce returns of tens of thousands of crores and other spin-offs. Divestment will only raise Rs 2,000 crores and weaken BHEL.
The decision is not BHEL's, but imposed on it by the government. So much for autonomy!
Privatisation of Indian PSUs has been a sad, shameful, story. As this column said six weeks ago, it typically lacks an economic rationale, transparency, competitive bidding, and fails to defend employees' interests. The first PSU outright sale -- Modern Foods --produced a disaster. The latest (Centaur) is also a scandal.
Such "robberisation" is espe-
cially odious when the PSU involved is internationally competitive, like BHEL.
The UPA may well reverse its decision on BHEL. But the central issue is bigger. The UPA must undertake serious economic rethinking. It has dragged its feet on the NCMP's pro-poor measures like the EGA, failed to raise agricultural credit and health spending, or create a "Prathamik Shiksha Kosh" with the Rs 13,000-crore education cess.
It has done little to relieve acute agrarian distress, which is driving farmers to suicide. Distress will grow as millions have delayed sowing.
Even as the UPA ignores the agrarian crisis, it has implemented pro-corporate measures with great speed: raising foreign-investment caps in insurance and telecom, making concessions to domestic airlines, and opening up mining to foreign capital.
After the visit of Wal-Mart's CEO, the UPA contemplating 100 percent foreign equity in retail trade. This will create a high-energy "supermarket culture" with monopolies and wastefulness. Worse, it will threaten millions of
livelihoods -- small grocers, vegetable-sellers, pavement-stall-owners.
In WTO negotiations on services, the UPA is trying to obtain more H-1B visas from the US for software engineers in return for opening up domestic services. This is a double whammy. Multinational corporations will intrude into education, water, and power supply. More H-1B visas will drain India of software talent.
This trend is likely to accelerate
with Prime Minister Singh's forthcoming US visit. A vitally important decision will be made there on Washington's support for India's bid for a permanent UN Security Council seat.
India has been lobbying for this bilaterally and through the G-4, including Brazil, Germany, and Japan. India has dropped the demand for a veto, which Washington opposes.
Right now, two things are clear. The US wants only a limited expansion of permanent membership, by "two states or so." It has identified one, Japan; the decision on the other will be political. India's bid will be endorsed only if it agrees to play second fiddle to
Washington.
The choice is stark: get into the Council as a US ally/client, or remain an independent power in a multi-polar world.
The sole rationale of a Security Council seat is that it will expand India's room for independent policy-making so she can promote universal causes like peace, equity, and justice. This won't happen.
Worse, the US wants India's agreement to amend the UN Charter to permit military force in "anticipatory self-defence." This doctrine connotes pre-emptive and preventive war and is impermissible under international law. This means a powerful state can wage war on a country if it suspects an attack, or wants to permanently disable it.
This is a recipe for international brigandage. India will contribute to undermining international security if it supports this amendment.
The UPA/Congress must rethink beyond BHEL. The Congress has much to lose by breaking its alliance with the Left. The next Assembly elections will be testing for the Congress. It can ill-afford to get discredited among the people.
The voter punished the NDA for claiming that "India is Shining." It will be truly tragic if the UPA attracts public anger within one year in office -- for claiming everything is hunky-dory.
Praful Bidwai is an eminent Indian columnist.