RSS-affiliate Bharatiya Mazdoor Sangh (BMS), founded by former communist trade union leader the late Dattopant Bapurao Thengadi, today lodged its protest against the proposed Air India sale. The union pressured the Narendra Modi-led BJP government to ponder this decision. This RSS body, along with another one called the Swadeshi Jagaran Manch (SJM), also set up by Thengadi, invariably oppose all pro-market, forward-looking policies of all governments.
Furthering the same half-baked economic theory, SJM’s Ashwani Mahajan has written an article in The Print that said, “It’s not the government’s business to run a business. But at the same, one must not throw away their assets.” How a company that makes losses, which are compensated by the taxes of people who are not the reason for the loss qualifies as a state asset is a question the article does not deal with while proposing that the government must float an IPO to raise the money.
A statement released by the BMS read: “Ever since inception, public sector undertakings have been the driver of growth and value creation. Perhaps they are the only enterprises in India that fulfilled all the objectives laid out according to the Industrial Policy Resolution of 1956.”
The saffron communists said it was unfortunate that the government was selling PSUs in the name of resource mobilisation to fund social spending. The union said that selling a PSU to a private player was not going to help the government mobilise resources and finance social spending. It reasoned that privatisation did not free the government from its responsibilities. The communist thinkers did not clarify, however, why ordinary taxpayers of the country, including the poor who pay consumption tax, must bear the burden of a middle-class luxury like an airline.
An Air India official told the media on 24 January, “The airline earlier spent close to Rs 4,000-4,500 crore a year for servicing its debt. This figure has now come down to Rs 1,400-1,500 crore after a large chunk of the airline’s debt was moved into an SPV last year.”
Civil Aviation Minister Hardeep Singh Puri had told the parliament in December 2019 that Air India’s accumulated losses in the past decade stood at about Rs 69,575.64 crore. Can this money be raised by an IPO? What about the losses before that and the losses of the future after the raised money is exhausted?
The communist Sangh union said there were segments of the market where both public and private sector enterprises were not performing. They argued that there were cases where private players failed to generate own resources, ignoring the fact that the loss of a private company does not turn into an additional burden on the taxpayer, that it is the loss of a few businessmen and shareholders of their company.
The BMS alleged that private companies that run on losses take the money in form of loans from banks (many in the public sector) and fail to repay the loan, deepening non-performing asset (NPA) crisis. However, the saffron communist union did not explain why, therefore, banks should not be privatised so that such loans are not granted in the first place.
The union said that while calculating profit and loss of Air India, the government needed to consider that Air India operated on many low-profit or loss-making routes to serve passengers and connect people where a private player will not be willing to work. The communist union stopped short of explaining why an essential need of connecting people must be met using an expensive mode of transport like aircraft.
Privatisation of Air India can have a cascading impact, the BMS said, like that of airports that will lose flights. The sale may lead to further crises, with many of the emerging cities facing the crisis of connectivity, the BMS added. The BMS statement did not clarify why any facility like an airport must be launched without a feasibility study on its sustainability or why the people across the country must pay for the air-unconnected people.
The BMS pressured the government to think “a hundred times” before going for the disinvestment of Air India.
Before establishing the BMS in 1955, Bharatiya Kisan Sangh in 1979 and the SJM in 1991, Thengadi was a member of the Hindustan Socialist Republican Association between 1936 and 38. He was an organising secretary of the Indian National Trade Union Congress from 1950 to 51. He was also associated with the Postal & Railway Workers Union (Communist Party).
While Thengadi’s social thinking changed under the influence of Madhavrao Sadashivrao Golwalkar, the economic philosophy that drives the BMS, BKS and SJM did not suggest he ever ceased to be a communist.
Another RSS swayamsevak and BJP MP in Rajya Sabha Subramanian Swamy has opposed the government effort to privatise Air India, too, his education in economics notwithstanding.