Karnataka’s Leader of Opposition Siddaramaiah urged Prime Minister Narendra Modi to withdraw the decision on disinvestment in public sector banks (PSBs) to promote economic participation of every individual in nation-building.
Noting that disinvestment was definitely not the same as opening up for privatisation, the Congress leader alleged that through disinvestment of banks, “the BJP government is executing day-light robbery of the common man”.
In a letter to Mr. Modi, the Congress leader said the Centre’s decision on disinvestment in PSBs ‘is worrying and is backed by an unfounded economic approach’. The recent announcement by Union Finance Minister Nirmala Sitharaman to sell PSBs as part of the disinvestment programme has sent ripples across India, raising eyebrows among economists, political leaders and also the common man.
The former Chief Minister said the decision lacks exhaustive research, consensus among banking professionals, experts and bank employees, and an analysis of the outcome. “The decision stems more from the failure of the government to increase revenue in the last eight years, rather than the structural need to disinvest,” he alleged.
Noting that the Union Ministry of Finance cited governance issues and non-performing assets as reasons for privatisation, Mr. Siddaramaiah said, “In reality, it is a short cut to increase their revenue and bridge the fiscal deficit, and to make it easy for industrialists to take ownership of India’s public assets at a cheaper price.”
The Congress leader cited recent examples of Yes Bank and IL&FS being bailed out by PSUs, such as SBI and LIC, and said even the USA had to bail out private banks after the 2008 financial crisis, thereby nationalising the losses.
“Corporate governance and non-performing assets are baseless and unfounded reasons to disinvestment,” he said.
Instead, Mr Siddaramaiah said, the government should focus on restructuring corporate governance with more efficient and qualified leadership, strengthen insolvency and bankruptcy laws, and ensure punishment of fugitive economic offenders.
The former Chief Minister told Mr. Modi that disinvestment of PSBs would lead to social injustice through denial of reservation to OBCs, SCs and STs.
