Turning to find out the constitutional mandate on privatization, Indian Constitution, though, inherently socialist in character, policy attitude of the government has been mixed (economic) approach.
by Vijay Kumar
The Central Government of India is on a spree of privatization. It can be well-understood from Prime Minister Modi’s statement that the “government has no business to be in business”. The government is selling or disinvesting many public sector units including banks.Such announcement of privatisation has created an uproar from opposition political parties and generated an apprehension among the general public, especially to those who are working in government sectors.
If we analyse the statement “government has no business to be in business”, we may find that it is well-founded in the core of philosophical and jurisprudential understanding infused by various thinkers namely, Jeremy Bentham and John Stuart Mill. To this understanding one see the role of the state “to provide subsistence”, “to produce abundance”, “to favour equality”, and “to maintain security” for the citizens. However, it can not be denied that there is no possibility of a contrary notion of the “role of the state”, To assert that there are different schools of thought as well.
Turning to find out the constitutional mandate on privatization, Indian Constitution, though, inherently socialist in character, policy attitude of the government has been mixed (economic) approach. In a way, thus, it may be argued that encouraging private participation with the element or tilt to socialism-aspect is not something ultra-virus. Therefore, the onus is on the government to maintain the basic features of the “welfare state” especially when it is hosting a large section of the population living below the poverty line and to bridge the economic disparity/rich-poor divide.
The obvious question arises here is why people are apprehensive of privatization? Such apprehension has been well-explained in Marxian philosophy based on economic condition of the society. The philosophy emphasis that in any epoch of the history a society has been dominated by the “superstructure” created by the class of people who controls the economic resources. The concerns of Indian citizen is perfectly based on the way of governance adopted by the various governments mainly after the Independence. Such Concerns of people can be broadly categorized as follows:Firstly, social security – this is one among the top reason which is absent in the governance of private enterprises. The existing labour law provides minimal standards for the employees working in the private sector. Even those minimal standard has very poor implantation on the ground. Secondly, the welfare of employees is generally of no priority or at least priority of the private employers. In this fast technology-driven life where mental stress, happiness quotient (India is already a very poorly ranked country in this aspect) of employees need priority, a hurried-decision will deteriorate the situation.Thirdly, there are many affirmative actions that the government is taking to uplift the lower-strata of the society. Such as equal opportunity and reservations for a certain group of peopleis/are inherently preserved in the government jobs, it is not clear that how the central government is going to continue with this. Despite, many allegations of corruption and discrepancies in the appointment process of government jobs, by and large, the process is open and subject to much scrutiny. Such checks and balancesare not there with regard to the appointment process in the private sector.Fourthly, but not the last,many governmental bodies and PSUs falls under the definition of “State” under the definition provided in article 12 of the Indian Constitution, thereby, bound to many special laws, for example, Right to Information Act (RTI) 2005 where they are obliged to disclose certain information to the public. Such mandate is not there and no clarity on this aspect is available in this regard. And moreover, the application of Part III of the Constitution, i.e., fundamental rights of the citizens can be secured in such scenario. In recent interpretation, a private person or entities can also held responsible for the violation of the fundamental rights of the citizens, however, there is no uniformity, certainty, and predictability in their application. Thus, in this regard also, government has to come up with concrete plan.
So far, the government has not shown its intent on the abovementioned issues to bring private sectors into the ambit of stringent legal regime. The government has also not looked effectively into the implementation of the “barely enacted laws” to regulate the private sectors and their activities.
Mis-governanceor letting the private sector loose can lead to disaster. Where there is already a perceived notion of collusion of the private sector (especially MNCs and TNCs) and government officials and political class, it will be just a matter of time to turn any republic intoa “banana republic”. A recent example of such mis-governance can be seen from the logger-head between Reliance and Amazon over the RIL-Future Group deal. It is beyond the imagination how a foreign investor could investin a Indian company having business in the retail sector when there was an FDI bar in that sector. It is the best illustration to depict the inefficiency from the Competition Commission of India (CCI) to clear that investment. At the same time, it is of real concernthat how one clause of an agreement between two private entities can put at stake the direct employment of 25,000 persons and about 11 lakhs jobs in total.
These are the well-founded reasons why people are apprehensive of the “random privatization” steps from the government. If the government intends to privatize, it has to do many preparatory works in terms of enacting laws and stringent policies to keep checks and balances over private sectors mainly inthe abovementioned areas. However, such intent is barely visible from recent actions.
Vijay Kumar: Assistant Professor (Law) Reva University Bangalore. He is also pursuing his Ph.D. from IIT Kharagpur in the areas of International Law.
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