Why Public Sector?


Today the country is in an economic crisis. There is massive unemployment. Rural infrastructure is not improving as Government does not want to spend money. (To reduce fiscal deficit) They want mega projects on roads, harbors where Private Sector is encouraged with Viability Gap Fund, Public Private Partnership and Public Finance is provided to private corporates. That is not helping the economy. It is Public Sector which can invest, generate employment, provide infrastructure at cheap rates and provide reservation in jobs. But that is being privatized step by step. It is wrongly told that Public Sector is inefficient. Look at a few examples.

  • It is the Public Sector Indian Railway which runs 20000 trains everyday transporting everyday more than 8.26 crore people at the cheapest rates in the world.
  • It is the Public Sector Post Offices which deliver letters and money order at the cheapest rates to rural areas which are not reachable easily.
  • It is the Public Sector Transport Corporations which provide cheapest buses through out the country.
  • It is the Public Sector Electricity Boards which provide the cheapest electricity to homes.
  • It is the Public Sector BSNL & MTNL which provide cheapest communication inspite of being strangulated by the Govt.
  • It is the Public Sector Oil and Gas companies which provide Petrol, Diesal and Gas even in interiors at cheap rates.
  • It is the Public Sector Banks which provide cheapest loans for agriculture, education, housing , small and medium and micro enterprises in the whole country including in remotest areas.

But the Govts in Power after 1990s have been promoting privatization following the theory of
Free Market Economy which is a failed concept. The present Govt which came to power with
A lot of promises like Rs.15 lakhs black money to be credited to each account, create 2 crore jobs
per year, double the income of farmers, etc. which is speeding up the Privatization Policy which is
one of the reasons for the Economic Crisis.
Let’s recall few instances:
 It is this Party when it was in Power (NDA 1) that sold Videsh Sanchar Nigam Ltd which
was providing cheapest internet services to Tata Telecommunications at a throw away
price which Tatas could recover by selling few Assets (Buildings) alone. Now Tata
Telecommunications is wound up.

 It is this Party when it was in power which sold Indian Petrochemicals Ltd to Reliance
and made Reliance a monopoly in Petrochemicals.
 It is this Party in power which has forced Public Sector Oil Companies to collaborate
with Reliance and Adani Group.
 It is this Party in Power which has forced State Bank of India to be a junior partner in
Reliance Jio Payment Bank.
 It is this Party in Power which is destroying BSNL, MTNL, HAL, Power Sector, Steel
Sector and providing them to the Ambani’s, Adani’s and Agarwals (Vedanta) because
they were the biggest contributors of Election Funds. So let us analyse the history and the present status of Public Sector: How Public Sector was started? The Public Sector was born in this country at the instance of big industrialists whose famous
Bombay Plan recommended that government should invest in creation of Infrastructure where
return on investment will be slow. Thus, the birth of Public Sector begun and entrenched
themselves as the growth drivers of the nation and were termed as “Temples of India’ by our first
Prime Minister Jawaharlal Nehru. Some Private Industries which were failing were also taken over by the Government like the
National Textile Corporation to save them. The Irony is that the same private sector now wants the public sector to divest their share holding
which would enable them to take over their assets accumulated over six decades. The Public
Sector continues to be the major employment provider and employs more than 19.5 million
across various industries. It has strong presence in key infrastructure sectors viz. Power, Steel,
Coal, Petroleum Refineries, Railways besides Financial Institutions, Insurance, Tele-
communication, Pharmaceuticals, Airlines and many allied sectors. The investment made over these years have quadrupled and have been giving huge returns. The
average dividends paid by the public sector companies to the government exchequer exceeds
more than Rs.45,000/- Crs per year. Besides providing direct employment to millions of our
countrymen, it enables indirect employment to multiple sectors and thus accelerate the economic
activity of our nation. The demand made by the private sector to disinvest in the existing profit making units and
withdraw from profit oriented sectors, needs no explanation. The ever hungry multi nationals
across the globe are vying with each other to enter our nation which has huge technically qualified manpower, an younger population and the largest middle class. So far, the public sector
has been able to provide affordable access to goods and services to our people due to it’s pro
people policies. The Railways subsidises the passenger fare, the telecom service provides the last
mile connection to the villager, the households are provided with subsidised electricity, the
postal services offers cheapest rates and the Public Sector Pharmaceutical Industries supply life
saving drugs at affordable cost; If allowed to privatise, the entire scenario will change and all the
services will become dearer to the common man.Privatising Defence Public Sector Companies
will endanger the Nation’s security The ultimate aim to privatise the public sector is to help few individuals and multi nationals to
assimilate the well entrenched and profit making enterprises and establish their own companies,
which would deprive the common man access to affordable service in all the sectors. Hence, it is
the bounden duty of every conscious and right thinking citizen of India to support and join the
movement to “Save Public Sector” and stop the evil designs of the politicians and government.
Let’s have a glance of few of the Public Sector Companies – INDIA POST THE OMNIPRESENT SIGN ACROSS THE NATION The only sign visible across the length and breadth of the country including the remotest and
tiniest villages is the India Post. They just do not carry mails from and deliver them but they
perform diverse work like collecting deposits, act as a life insurer and delivers 38 other services
which can broadly be divided into Communication service (Letters, Post cards etc.),
Transportation service (Parcels), Financial services (Savings Bank, Money Order, Postal Life
Insurance) and Premium value added service (Speed Post, Business Post). Though established by the British, it is now renowned for its reliable service all over the world.
Despite the onslaught of private courier services, it has withstood the testing times and proved its
mettle. Some of the key features and achievements are;

Urban Post
Offices Rural Post
Offices Gramin Dak
Sewak Post
Employees Gramin Dak
Sewak 15,649 1,39,882 1,29,975 1,81,477 2,37,341

PROFILE OF SAVINGS BANK SCHEMES DURING 2017-18 Name of the Scheme Number of Accounts Outstanding balance (Rs.inCrs) Savings Accounts 199451789 86304.98 RD Accounts 121403354 92322.97 TD Accounts 18742881 99289.07 MIS Accounts 15376218 181688.06
NSS Accounts (87 & 92) 272867 3098.74
PPF Accounts 2530301 69985.60
Sr. citizens Saving Scheme 1420143 41717.69
Cumulative Time Deposit 202034 -38.38
Fixed Deposit 402 19.76
MSY Accounts 141295 1.51
Sukanya Samridhi Accounts 11698945 22904.84
Total (1 to 11) 371240229 597294.84
NSC VIII 87165.57
KVP 37983.29
Total (14+15) 125148.86
Grand Total (13+16) 722443.70
The invaluable contribution of the postal department and their service to the poor will be affected
if privatised. The Present Government has proposed to outsource many services and also started
a Postal Bank of India. This could have become the biggest Bank in India but real efforts are not
taken. Now they want to convert it into small bank and privatise it. INDIAN RAILWAYS MOVING MOUNTAINS The vast resources under the disposal of the Indian Railways and the scope for exploiting the infrastructure laid with billions of rupees investments made from the tax payers money is a
constant attraction to the preying private sector. Though the government has set in motion the
privatization of the Railways, strong public opinion against it and Trade Unions resistance to
such moves are slowing down the moves of the Government.

ASSETS ACQUIRED BY WHISTLING AROUND THE WIDTH AND BREADTH OF THE NATION- 2017 March LAND HOLDING ALL OVER THE COUNTRY : 11.42 lac acres WAGONS, COACHES AND LOCOMOTIVES : 2,77,987 freight wagons 70,937 passenger coaches 11,452 locomotives PASSENGERS CARRIED DAILY BY THE RAILWAY : 8.26 billion TOTAL LENGTH OF THE RAILWAYS : 67,687 Kilometers TOTAL EMPLOYEES IN THE RAILWAYS : Above 13,08,000 TOTAL REVENUE OF THE RAILWAYS IN 2017-18 : Rs.1,87,400 crs. COUNTRIES CONNECTED BY THE NETWORK : Nepal, Pakistan & Bangladesh NUMBER OF PASSENGER TRAINS RUN DAILY : 20,000 The travel by the rail network in North America and Europe and other countries are costlier than air travel. The Indian Railways mainly cater to the poor and middle class population at cheaper fares due to subsidisation of the passenger travel. Privatisation would sound the death knell for the most reliable mode of travel for the common man. The employees strength is being reduced every year. Many of the services are being outsourced. Now, there is a move to privatise railway
stations and import coaches and wagons. Delliote has been appointed as consultant for revamping. But this sinister move is not to revamp but to privatise the railways. Let us all rally around and oppose the move. BHARAT SANCHAR NIGAM LIMITED CONNECTING INDIA BSNL is India’s oldest and largest communication service provider (CSP). It has a customer base of 12 crores as of June, 2015 and reaches all remote corners of the country. It was formed on 1st October, 2000 as a corporation by merging the erstwhile Department of Telecom.operations and Department of Telecom Services. BSNL is a 100% Government of India owned Public Sector Undertaking. The sinister moves of the government to stifle the functioning of the BSNL were many.

1. First, the controversial GSM tender has affected BSNL.( Not provided in time)

2. The Government did not return the cost of spectrum surrendered by it, amounting to
Rs.6700 crores for many years (Now it is given)

3. Permission to provide fully-mobile services using CDMA technology in addition to the GSM technology under the existing licenses was denied and delayed.

4. There was delay in Cabinet decision for release of initial funds for Bharat Broadband

5. The appointment of personnel has been discontinued since the creation of BSNL in 2000. Against all these odds, the Company’s “Cell One” network (GSM/GPRS) was launched in late 2002 and within six months it had attracted 2.4 million subscribers which has increased to nearly 80 million in 2014.

Some of the highlights of the BSNL’s achievements are:
 It is the largest provider of fixed telephony.
 It is also the largest broadband services provider with more than 60% market.
 It is the fifth largest mobile telephony provider in India.  BSNL has large number of work force at around 2.25 lac as on 31.12.2016.
 Till 2006, BSNL was earning a huge profit of Rs.8000 – 10000 crores, with an annual
revenue of Rs.40,000 crore.
 The first mobile tariff was Rs.16/- per minute! Charges were realized for both incoming
and outgoing calls by the private operators till BSNL’s entry in the market.
 Call charges came down drastically after BSNL entered the market The investment BSNL made towards the establishment of a modern telecom infrastructure in the country, in terms of optical fibre networks, telephone exchanges, cables, switches etc. is one of the main reasons why private players are trying to acquire a stake in it. BSNL has to be saved for the security of the country and for the rural India where private sector will not bother to give service. Now the telephone towers of BSNL are separated and made into a separate company so that it can be sold to private (Reliance?) A company which has crores of cash surplus is pushed into a crisis. Salary not paid in time. Same is the case with MTNL. POWER SECTOR ILLUMINATING THE INDIAN SUB-CONTINENT In 1947, India had a power generating capacity of 1,362 MW, all of which was in the Private Sector. Not even 1/10th of the present capacity of an individual State. Later on, the government initiated various measures to improve power generation by floating separate entities for hydel power, thermal power and atomic power. Later on power distribution companies also came into being. The NTPC Limited, NHPC Limited, NPCIL, NLC, DVC etc. are some of the important Central Power Generating Corporations. Besides, various state governments have independent power
generating companies. Bharat Heavy Electricals Limited (BHEL), is the 7th largest power equipment manufacturer in the word, has been earning profits continuously since 1971-72 and paying dividends uninterruptedly since 1976-77.
 NTPC is the largest state owned power generating company in India.
 NHPC Limited has an installed capacity of 6,717 MW.
 NPCIL, operating atomic power plants and implementing atomic powerprojects.
 Power Grid Corporation of India has established vast and extensive network of transmission lines across the country A bird’s eye view of the status of power generation today in India as on 21.08.2019 Sector MW %;
State Sector 102,818 28.5
Central Sector 90,177 25.0
Private Sector 1,67,462 46.5
Total 360,456
Private sector power generating companies exploit the prevailing political and bureaucratic system and manage to sell power at much higher rate to the detriment of the State Electricity Boards and the general public. An example is: NLC provides electricity to TNEB at Rs.2.30, where as Adani group offers at Rs.7.01. Power generated by Private Companies are sold at exorbitant price for distribution at the cost of tax payers’ money. Public Sector Power generating companies are deliberately crippled by not supplying machines and spares required and power generated at Private Companies are preferred to the power generated from Public Sector Companies at a higher price in some of the States. The Private Power companies like Bhushan Power, Essar Pover etc are the biggest NPAs in Banks. Energy is a basic requirement in today’s world and thus access to it should not be left in the hands of a few private companies. PUBLIC SECTOR BANKS BANKERS TO THE NATION The year 1969 was a watershed year in the history of banking in India. Former Prime Minister Smt.Indira Gandhi’s bold step opened the doors of banking services to the common man. Till then, banking was affordable and accessible only to very few affluent people. The scenario changed dramatically after Nationalisation in 1969 followed by a second round of nationalisation in 1980. The poor farmers, small business men, daily wage earners and all sections of the marginalised society accessed Banks’ loans only after Nationalisation. Various new schemes like PMRY, IRDP etc. formulated by the government reached the poor only through Nationalised Banks . The old private banks and the new age private banks do not participate or implement government
initiatives or programmes. They are purely profit driven enterprises run by Corporates. We furnish below a comparative table analyzing the growth of the banking sector after Nationalisation. Branch Network:
Year SBI & Other Schedule Coml Regional & , Non-Scheduled Bank Total Coml ( Associate Brs. Bank Brs Rural Banks Brs Brs(LABs,SF,Payments) bank brs 1951 643 2004 1504 4151 1968 3379 5104 207 8690
Mar.2017: 25593 98639 21713 483 146428 Mar.2018: 23832 100783 22085 1949 148649 Mar.2019: 23426 102357 22233 4259 152275

Segregation of Other SCBs,

Year SBI & Associates Public Sector branches, Private sector , Foreign bank Total SCBs ( Branches (Other than SBI) bank branches branches branches
Mar 2017: 25593 68 432 29 906 301 124232
Mar 2018: 23832 68 998 31 485 300 124615
Mar 2019: 23426 68 916 33 125 316 125783
Spread of Business: (1969-2019) (Rs. In Crores) Year Category Branches Total,
Deposits Total
Credits Operating
Profit Net Profit 1969 All 8,262 3,897 3,035 NA NA Mar 2017 PSBs 94,025 78,10,464 53,66,399 1,54,275 -6,659 Mar.2017 Private 29,906 28,33,267 24,10,301 1,06,437 37,089 Mar.2018 PSBs 92,830 80,14,389 55,25,609 1,47,787 -77131 Mar.2018 Private 31,485 32,61,620 28,34,569 1,19,273 33,545 Mar.2019 PSBs 92,342 84,86,213 59,26,286 1,49,807 -66,606 Mar.2019 Private 33,125 37,70,013 33,27,457 1,29,212 27,621
It is observed that there is a continuous reduction of PSBs Branches and rapid growth of Private sector branches in the last three years.
The government has approved dilution of its share holding in PSBs to 52%. The formation of Banks Board Bureau and later to form a Holding Company that will hold Government Investments in all Public Sector Banks will be the first step towards Privatisation. P.J.Nayak committee recommendations of reducing the shareholding to 40% has been accepted by the government. The governments in the past have privatized ICICI into a private bank, although ICICI was started to promote industries. UTI was privatised by converting into UTI Bank and then as AXIS Bank. HDFC, which was promoted to promote the housing sector has become a private sector HDFC Bank. Now, the government has announced that , it will reduce
it’s share holding in IDBI bank to 45%. If Make in India, Swatch Bharat, Digital India pension Yojanas and Start Ups have to succeed, the funds have to be provided by the public sector banks. Private sector will never fund these schemes as they would not yield immediate profits and may fail too. If the farmers have to get agricultural credit, If Small, Micro & Medium enterprises have to get adequate credit, If our
children have to get education loans and If the SHGs have to get credit, only Public Sector Banks
can do that. So Let us support public sector Banks. Save and Protect public sector banks. Demand creation of Development Finance Institutions. LIFE INSURANCE CORPORATION OF INDIA SAVIOURS OF THE SOULS LIC is one of the oldest Public Sector undertaking that plays a dominant role in the development of our country with its service and investment. Despite, the IRDA guidelines in the name of level play field thus abolishing well established old plans in the name of fair play, obstacles in
recruiting agents, LIC is able to successfully outwit all other private players in the market. The
data below shows how important LIC is for India. THE MILESTONES OF THE L.I.C. : STATISTICS WHICH (As on 31.03.2019) SHOWS IT’S STRENGTH Government’s Investment : Rs. 5 Cr/ 100 Cr TOTAL NUMBER OF INSURANCE POLICIES : Individual 29.09 crs. Group 11.61 crs TOTAL INSURED AMOUNT : 66,39,586 crs. TOTAL NUMBER OF EMPLOYEES : 1,08,684 TOTAL NUMBER OF AGENTS : 11,79,229

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