Archive for February, 2018

Available now in PDF format is a Hindi translation of “The Political Economy of India, Democratic Rights, and the Democratic Rights Movement” by Rajani X. Desai, originally published in Aspects No. 69.

The translation is done by the Karwan Collective, which may be contacted at karwancollective(at)gmail.com.

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— Hemindra Hazari writes:

The Punjab National Bank (PNB) Nirav Modi scam has led to a clamour from certain quarters for the privatization of India’s Government banks. It was only to be expected that Assocham , the corporate sector body, saw in this development a chance to ask for the privatization of Government banks, since some of its members might be interested in buying some of them up at cut-rate prices. Arvind Subramanian, Chief Economic Adviser, who had earlier  argued for the closure of Government banks in order to allow private banks to increase their market share, has renewed his argument recently by asking, “first, if not now, when? second, if not this, what?”. Shekhar Gupta has made the astounding claim that India’s Government banks have a 47-year record of scams. Adi Godrej, chairman of the Godrej group, pitched in for privatization with an equally preposterous claim that “I have not  heard of any major scams by the private bank.(sic) There is always something going wrong in companies from time to time, but it’s always more controlled in the private sector  if at all and much better managed.” Ravi Venkatesan, the chairman of the Government-owned Bank of Baroda, no less, also contributed with “privatization of at least a few big banks is probably the only solution.” The nation is being warned that the fate that befell PNB will befall the entire Government banking sector, and private ownership is the only solution to provide sound management.

The underlying belief of the school of privatization of Government banks is that bank nationalization was a national folly in 1969, which bred managerial incompetence, moral hazard, a drain on the exchequer’s resources and crony capitalism. The protagonists of the privatization of Government banks fail to acknowledge the fact that before nationalization private sector banks were not reaching banking services to the agrarian sector and small industries, nor contributing to a more balanced development of the economy. They ignore the fact that the banking sector was rife with mismanagement: in the two decades before nationalization, 736 banks either failed or had to be taken over by other banks.  (more…)

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On February 13, the BEST, the undertaking which runs Mumbai’s public bus services, announced that it would now bring in private contractors to run BEST buses. The following joint statement was prepared before the February 13 announcement, but it remains relevant. The BEST’s decision to privatize has been taken under duress: the Municipal Corporation has refused to provide a grant to the BEST until it adopts its ‘reform’ package, the centrepiece of which is privatization. The statement counters the Corporation’s claim that the subsidy to BEST is unsustainable. — RUPE

 We condemn the fact that the budget for 2018-19 presented by the BMC does not provide for a grant for BEST  bus services. The BMC Commissioner is demanding that the BEST first implement his unilateral demands or ‘reform package’ that includes: (i) increase in fares, (ii) reduction of routes, (iii) partial privatisation (wet-leasing), (iv) reduction of workers’ emoluments (through freeze of D.A., cancellation of medical allowance, cancellation of welfare schemes for workers, etc), and (v) increased workload on officers. His argument is that the BMC cannot sustain financial support to BEST.

However, it should be noted that it is standard practice worldwide, and in every city of India, to subsidise public transport, in the interests of the whole city. Some cities, such as Paris and Seoul recently, have also taken steps to fight days of extreme air pollution by making public transport free of cost on those days. (more…)

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The lead headline in today’s Times of India is that Richard Branson, the British entrepreneur on whom Vijay Mallya modeled his goatee and lifestyle, has signed an intent agreement with the Maharashtra government to develop a hyperloop route between Pune Central, the proposed Navi Mumbai international airport and Mumbai.

The hyperloop is a new technology that moves passengers in capsules at near-sonic speeds. The Times provides us with colourful diagrams and informs us that it will reduce travel times from the present three hours to 20 minutes. Branson says the system will have a capacity of 150 million passengers a year. Branson’s US-based Virgin Hyperloop One (VHO) says the Pune-Mumbai route could result in $55 billion (Rs 3.5 lakh crore) in “socio-economic savings (time savings, emissions cuts, accident reduction, operational cost savings, etc) over 30 years”.

The name of the firm is quite apt, as Virgin Hyperloop has not yet set up a hyperloop anywhere in the world. Indeed the technology is not yet commercially operational anywhere in the world. Branson confides that “Possibly India may have this track as the first operationalized route, though Dubai is competing close”. The project is claimed to cost a mere Rs 20,000 crore, about one-fifth the projected cost of the Prime Minister’s favourite project, the Mumbai-Ahmedabad bullet train, for about one-fifth the distance.[1] As such, it is sure to enthuse the state government, anxious to procure its own white elephant. Like the Prime Minister’s pet, it will be an expensive thing to feed: the Times passingly mentions that “The fare is too early to decide, but will probably be close to airfares.” Presumably passengers will be persuaded to board it with the help of subsidies, a small price to pay for having the world’s first commercial hyperloop. (more…)

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