Tongue of Slip!!
A V E
Established: 1995
Issue 65, 2020
Pg. 3
Writings on the Wall
Saturday, March 6th 2020
G h o s t s Tongue Of Slip!! An article by Aayat Hazarika
Pg. 2
Pg. 16
The Big and The Bad
-Vasuman Lohia, XI
The Indian government certainly likes making history habitually, this time by announcing the privatization of some Public Sector Banks (PSBs) and an insurance company for the Financial Year 2021-22. This can be considered the government’s most zealous plan since the Vajpayee era. Privatizing banks is definitely a good idea to a certain extent, but privatizing LIC would be a disaster. When a bank is sold to a private entity, the government gets back its capital. The value of this capital depends
on the market condition and the inherent strength of the bank. Once privatised, the government need not infuse further capital into these banks, which helps the government consolidate its fiscal position. Privatisation policy in India has been typically motivated by the need to raise resources in tough fiscal conditions. This commitment to reform is particularly significant in the wake of the new agricultural market laws thanks to which the government is facing incessant protests. Whether one likes it or not, Indian banking is headed the way of telecom and aviation. Private entities will walk away with the cream, leaving mostly unviable entities in the public sector. And all the king’s horses and all the king’s men will not be able to save Humpty
Dumpty from this fate. The private banks have a better net interest margin, lower costs and therefore continuing profitability even as public banks have lost money for the last five years. So, it is virtually written in the stars that private banking will continue to grab a bigger share than PSBs and corner the most bankable sectors, the best loan clients, and the cream of the deposit-taking business. Modi government’s plan to privatize LIC may amount to selling the family silver to pay the butler. The media appears to be excited that LIC will become a potential candidate for public listing. It is termed as a big bang reform. But what is the big bang? Flattening LIC is the big bang. Where will it lead to? People know the credential of NITI Aayog. BSNL is fast slipping into bankruptcy. The telecom requirements of Indian Railways are handed over to Jio. 25 Airports in the country are on the anvil of privatization. Do we require more examples? This attack on the LIC and its timing is not an isolated activity. It is part of a grandiose plan, a blueprint. The autonomy of RBI and that of other major market regulators like SEBI and IRDAI are being diluted. RTI Act is being amended to make it toothless. You have the Unlawful Activities Prevention Act (UAPA) Amendment Bill passed in the Parliament where-in a dissenter’s property can be attached. A critic can be labelled an ‘urban Naxal’, a ‘terrorist’, an ‘anti-national’ and handed punishment. The country’s Constitution and the Judiciary are under grave threat. The paramount question is, how to stem the tide? What
1
Weekly Newsletter of The Assam Valley Express
“Whether one likes it or not, Indian banking is headed the way of telecom and aviation. ”