Privatisation: Monopoly in Public Sector

The COVID-19 pandemic has hit every section of society, this includes government also. The government's treasury has stagnated, it has been left with no option other than raising taxes on fuels and households gas to fulfill its thirst for revenue. The other option is the privatization of its core sectors. 

The recently announced "National Asset Monetisation Pipeline" seems interesting and a positive approach. The government has announced to monetize the "de-risked" brownfield projects and core assets of the Central Government, the aggregate monetization potential of Rs.6 lakh crore over the 4-year period, from FY 2021-22 to FY 2024-25.

But, there are various concerns and questions raises from concerns. With the growing monopoly in different sectors like telecom, power, energy, 2-3 capitalists are acquiring Public owned properties in a dominating way. The recent purchase of Mumbai airports is a good example to understand the growing crony capitalism or monopoly.

"Own nothing, control everything"

                                        - John D Rockefeller, one of the richest men on earth in the 19th century.

This write-up is for those who are not aware or ignorant of the rising monopoly in the public sector. Or, Is the private sector is really doing good enough to lease out the public strategic properties.

Telecom

It is intended to lease out telecom assets(fiber cables, cellular towers, etc.) of Rs. 35,100 crore hold by different Public Sector Undertakings(PSUs) through Public-Private Partnership(PPP) model. But,  distribution will be done in an even manner, it doesn't look so.

There are only 3 major telecom service providers available in the market; Reliance Jio, Bharti Airtel, VI(Vodafone- Idea), BSNL.

BSNL possesses no government interest at all. It has started cutting out employees and its funding is almost negligible. 

Vodafone-Idea(VI) has been bankrupt, the company is urging for Government's takeover. Sooner or later, lakhs of crores will default.

Airtel is recording quarterly income with a loss of Rs. 16,000 crore (62%) cr in Q1 of FY 2020-21. It is also not interested in purchasing spectrums in the recent auctions.

Reliance Jio is the only major telecom company left, which has a market share of more than 38%.

Natural Gas and Oil pipelines

Rs. 24,000 crores of natural gas pipelines owned by GAIL and the Ministry of Petroleum, and Rs. 22,500 crores of oil pipelines of IOCL, HPCL, and the Ministry of Petroleum will be lease out.

The most interesting fact about these plans is that there are no major private players other than Reliance Industries available in the market.

Airports & Ports

The sold-out Chhatrapati Shivaji Maharaj International Airport is a controversial matter. The pre-existing agreement between National Infrastructure Investment Fund(NIIF) and GVK Airports Holding had been bypassed to hand over the 74% holdings to Adani Group.

Adani group was not in the airports business till the government announced the plan of privatization of airports back in 2018. The group holds a maximum number of 6 airports in the country, with existence of only 3 years.

Although, the government is ready to lease out 25 such airports in 4 years worth Rs. 20,782 crores hold by the Airport Authority of India(AAI). 31 projects in 9 major ports of Port Trusts and the Ministry of Ports, Shipping & Waterways are also in the target zone. 

Coal

Coal is the recently opened sector for private players. The holdings of Coal India and NLCIL will also be leased out to private players. The aggregate amount is Rs. 28,700 crores.

In recent auctions of coal mines in Jharkhand,  Chattisgarh, and Maharashtra, Adani mining has taken 3 out of every 7-8 mines.

Roads and Railways

The idea of the Operation, Maintain, Transfer(OMT) method has failed miserably in 2012, Toll, Operate, Transfer(TOT) had mixed success in 2017.

In the past few years, private trains like Tejas Express got a good response, but it is for the privileged. Poor cannot take the burden of private trains due to their expensive nature.

The announcement of Rs. 7200 crores of private trains in 2020 are still costing the time. Though only 2 companies have bid for the project, and one of them is IRCTC(which is a government company). We can state this project has failed. 

The idea of the first bullet train is taking its time since 2015, till now, not even tracks have been planted fully. It seems impossible for coming 5-7 years or more so. 

Conclusion

The whole point is about the irresponsible behavior of the Modi Government. How can the Finance Minister of the World's largest democracy take Railways, Power, and Roads as non-strategic sectors? All these three sectors consist 66% (Rs. 3,57,896 crores) of the Monetization Plan. 

You can't make decisions of public interest without consulting the public. 

The difference between Government-owned and Public owned must be crystal clear.