Finance Minister Nirmala Sitharaman. (File Image)
Banking services across India were affected over the past couple of days as public sector banks (PSBs) employees staged a two-day strike (March 15-16, 2021) to express displeasure over the government’s intent to privatise PSBs.
The impact was not only limited to customer services like cash withdrawals, cheque clearances, deposits, loan approvals and remittances but also government treasury operations.
But, that is not all. Employees of general insurance companies are undertaking a strike on March 17, and employees of Life Insurance Corporation (LIC) will protest on March 18.
So, why were they protesting and what has been the government’s response so far? Here are the details:
Who was protesting?
>> Collective banking employees’ union the United Forum of Bank Unions (UFBU) which consists of nine bank unions — AIBEA, AIBOC, AIBOA, BEFI, NCBE, NOBO, NOBW, INBEF and INBOC had called the strike to protest the Centre’s decision to privatise two more PSBs.
>> Others who participated included the Centre of Indian Trade Unions (CITU), and the United Forum of Bank Unions (UFBU).
>> The strike ended late on March 16, with AIBEA General Secretary CH Venkatachalam calling it a “full success” due to widescale participation and support from trade unions, farmers unions and political parties.
>> The Unions sought to dissuade the government from privatisation and instead proposed “addressing concerns that cause problems in running of PSBs,” according to Venkatachalam. The unions noted they see no need for privatisation as PSBs are “earning operating profits.”
>> Unsuccessful talks were held with Venkatachalam on March 4, 9 and 10 before the strike was called and Venkatachalam warned that if the government won’t listen “then more strikes will happen.”
>> The unions claim over a million employees participated in the strike.
>> Employees of general insurance companies will also strike work on March 17.
>> Employees of Life Insurance Corporation (LIC) will protest on March 18.
What is the deal with privatisation?
>> In her Union Budget 2021 speech on February 1, Finance Minister Nirmala Sitharaman said the Centre would privatise two more PSBs after it privatised IDBI Bank in 2019 and merged 14 PSBs over the past four years.
>> She also announced that one general insurance company will be privatised in FY21-22.
>> For 2021-22 fiscal, the government has kept the disinvestment target at Rs 1.75 lakh crore. Out of this, Rs 1 lakh crore is to come from selling government stake in public sector banks and financial institutions and Rs 75,000 crore would come as CPSE disinvestment receipts.
Oppositions’ stand
>> The Congress (INC) on March 16 asked the government to “accept defeat” and cede to the demands of protesting employees.
>> Meanwhile, Congress leader Rahul Gandhi accused the Centre of “working for the benefit of a few crony capitalists” who will “compromise the country’s financial security.” He also accused the government of “privatising profit” and “nationalising loss”.
>> Leader of the Opposition in Rajya Sabha and senior Congress leader Mallikarjun Kharge called out the government for taking the decision to privatise “without consulting the 75 crore account holders.”
>> The Congress had on March 15 extended “full support” to the bank employees’ strike.
Finance Minister Nirmala Sitharaman’s response
>> Addressing the media on March 16, FM Sitharaman sought to assure protestors that not all banks will be privatised and “only some PSBs are selected for divestment to strengthen their financial condition.”
>> She assured that throughout the process, the government would protect the interest of employees such as salaries, scale, social security, pension and other benefits.
>> She also said the government will ensure that once privatised, “these institutions will continue to function.”
Minister of State for Finance Anurag Thakur’s response
>> MoS for Finance Anurag Singh Thakur sought to reassure of the Centre’s “clear and transparent” disinvestment policy during Question Hour in the Rajya Sabha on March 15, and said concerns related to job loss and other facilities will be “taken care of.”
>> “If CPSEs are given for privatisation or for strategic sale, in the sale-purchase agreement to be entered, it will be decided that there won’t be job loss of people and all these facilities are provided,” Thakur said.
>> Thakur also addressed concerns regarding job losses in LIC, and said the insurer is “not being privatised, but has only planned an initial public offering (IPO).”
>> “We are just bringing an IPO. The extent of share dilution is not yet decided and no one is losing jobs in LIC because of the proposed IPO.”
>> Thakur also defended the Centre’s divestment policy saying it “clearly states divestment will bring investment, technology infusion and job opportunities. Overall, there will be more job opportunities and not a reduction in employment.”
Union Ministers and officials statements
>> During Question Hour in Lok Sabha on March 16, Prakash Javadekar – Minister for Heavy Industries and Public Enterprises said the government “always makes efforts to revive public sector undertakings (PSUs) that can be revived.”
>> He also listed out the PSUs that have been approved for revival, merger, or restructuring.
>> These include Brahmaputra Valley Fertilizer Corporation, Hindustan Steelwork Construction, Richardson & Cruddas, NEPA, Hooghly Printing Company, Konkan Railway Corporation, Mahanagar Telecom Nigam (MTNL) and Bharat Sanchar Nigam (BSNL).
>> He also clarified that the government is not privatising LIC.
>> Notably, the government had earlier deferred merging BSNL and MTNL citing the “high debt” of the latter. The merger was proposed in October 2019 as part of a Rs 70,000 crore revival package.
>> Telecom Minister Ravi Shankar Prasad has in a written reply to the LS said the merger is deferred “due to financial reasons, including high debt of MTNL.”
>> Tuhin Kanta Pandey, secretary, department of investment and public asset management (DIPAM) told CNBC-TV18 that the BSNL-MTNL package was “already approved and included VRS and money allocated to buy 4G spectrum, etc.”
>> Pandey said asset monetisation of BSNL and MTNL is also on the cards and “there are several properties which have been identified and going forward, they will go for bidding – mostly likely by next fiscal.”
What all is set to be privatised and monetised?
>> As per an Indian Express report on March 17, eight ministries have submitted their plans for asset monetisation and privatisation to meet the Centre’s “aggressive divestment target.”
>> It added that the NITI Aayog is “in the process” of working out a National Monetisation Pipeline for FY21-24 and has asked ministries to identify and share details of potential properties.
>> Ministry of Railways:
– Sources told the ministry plans to raise Rs 90,000 crore through asset monetisation which will include awarding 150 passenger trains to private players during FY22.
– The ministry is also looking to issue Requests for Proposal (RFPs) and Requests for Qualification (RFQs) for the redevelopment of 50 railway stations by March-end.
>> Ministry of Road Transport and Highways:
– It plans to monetise 7,200 km of roads through securitisation, Toll-Operate-Transfer (TOT) and infrastructure investment trust (InvIT) methods.
>> Power Ministry:
– There are plans to monetise, in two lots, transmission assets of the Power Grid Corporation of India (PGCIL) in two lots. The first lot is intended to be monetised in FY22 for over Rs 7,000 crore.
>> Telecom Ministry:
– Asset monetisation has been planned for Bharatnet, BSNL and MTNL.
>> Ministry of Youth Affairs and Sports:
– It has a target of Rs 20,000 crore and plans to monetise sports stadiums, and leasing operation and maintenance contract of the properties to private sector players.
>> Ministry of Civil Aviation:
– The Centre is considering selling the Airports Authority of India’s (AAI) stake in joint ventures like the Bengaluru, Delhi, Mumbai, and Hyderabad airports.
– Besides this, 13 AAI airports will be monetised via the Operation, Management, Development, Agreement (OMDA) model.
>> Ministry of Shipping:
– It has identified more than 30 berths for monetisation via public-private-partnership (PPP) mode.
>> Other ministries also expected to list potential asset monetisation include the Ministry of Coal, Ministry of Housing and Urban Affairs, Ministry of Mines and Ministry of Tourism.
