Economic slowdown is affecting all sections of society. But corporate lobby and the rich are taking advantage of the slowdown to extract benefits and press for favourable structural changes from the Government that they have helped to come to power. The Government is either clueless about slowdown or was in denial mode for a long time but now has become proactive and extending benefits to corporates and rich, defending its policies by insisting that these concessions will encourage investment and generate employment.
The Government has been banking on foreign capital, exports and private investments for development since the advent of new economic policy and reforms that have led to the present slowdown, over capacity generation due to easy loans and lack of increase in earnings of common man and increase in inequality.
But ignoring this reality, there is a massive tax cut for corporates and investors causing a deficit of Rs 1.45 lakh crore in tax collection. Proposal is there to establish big economic coastal zones like SEZs to attract foreign investors. The Government in its anxiety to attract and retain investors has brought down corporate tax to the lowest that around 17 per cent from 25 per cent. Similarly construction industry is also offered sops.
It has announced that it would raise more than Rs 1 lakh crore through sale of public sector. Privatisation of Air India is also announced.
There seems to be a clear game plan by interested private players to compel Government to sell “public sector assets at the lowest price and then to use it for super profit”.
This in the long run will erode Governments’ capacity to face future crisis and also to build a resilient independent economy. Nation’s sovereignty is at risk. Hence defend the public sector is a call which should rally all progressive and right minded people.
Dr B.K. Kango