CLEARANCE SALE!!! MORE TO COME….

about 23 days ago
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The biggest news today is most obviously this huge privatization move made the Govt. Call it a desperate move to meet its divestment target or the need to boost the sentiments, the bottomline is that it’s a good move to sell the PSUs. But the Govt needs to ensure that some part of the proceeds also benefits the common man, after all, our tax money did go into creating and running these undertakings for 70 years, isn’t it?  At the same time, the Govt needs to understand that very soon it will run out of companies to sell and meet its targets – it has TO work on concrete plans to generate more income and spend less or else the problem of deficit will only burgeon.

We all have been constantly raving and ranting about the need to privatize, questioning the need of the Govt to run so many companies when it should ideally concentrate on running the country. It is entirely another debate about costs going up the moment anything is privatized but that is the price which one has to pay for efficiency, isn’t it?

The Govt will be selling majority stakes and ceding management control in BPCL, Shipping Corporation of India, Container Corporation of India (Concor). Govt also plans to sell Tehri Hydro Development Corp of India and North Eastern Electric Power Corporation (Neepco) to NTPC.

The Govt’s divestment target for FY20 is at Rs.1.05 lakh crore and till 30th Sept 2019, it has raised only Rs.12,359 crore. It plans to raise around Rs.63,000 crore from stake sale in BPCL, Rs.2000 crore in SCI and Rs.13,400 crore in Concor. But will this happen before the end of FY20 – that’s the biggest question. Knowing the trade unions, surely this will not go as smooth as expected, it is sure to be a major uphill task.

And that brings us to the very pertinent question – why do trade unions oppose divestment/privatization?

Or the other way of looking at this – why do most of us feel that privatization is good? Well, the first and foremost thought that comes to mind is that efficiency will go up. We feel that better products and service will be delivered and that too within a set deadline.

But for those employed in PSUs, privatization often means longer working hours, more responsibility and accountability. It also brings forth fears of job security and that probably is the single biggest reason – they fear the hire-and-fire policy of the private sector and feel that their jobs, which in a PSU are secure till they retire will no longer be so.

Does this mean that all trade unions then are Left-aligned? Actually most of the Unions are more Right than Left and they oppose not against the administration but as an ideology – it’s a trade union and hence it has to oppose privatization; it’s like one of the tenets of the union. Also, trade unions fear that once the organization gets privatized, their wings will be clipped as unions in private sector do not have as much freedom as those in PSUs to oppose anything and everything from recruitment to other union activities. Thus trade unions fear privatization on ideological as well as their own existential fears.

A company looks at ways to maximize its profits while the trade union looks to maximize the benefit of its employees. And it is here that conflict arises – the Union feels that the company will impinge on the objectives of the employees and trade union. 

But the truth is that it is only a well-run company which can satisfy the needs of all the stakeholders – company, shareholders, customers and employees. And the Govt needs to concentrate more on its business – of running the country and getting people out of poverty, eradicate deaths due to hunger from India. Hope it manages to sell Air India too…sale of loss making units is what should be a priority.

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