If the Union government completely exits public sector banks after they are privatised, it will have “dangerous repercussions for the Indian economy”, the Congress said on Tuesday. The principal Opposition party was reacting to reports that the Narendra Modi government could introduce a Bill in the upcoming monsoon session of Parliament to facilitate privatisation of public sector banks with an exit clause for the Central government. There has, however, been no formal statement by the government in this regard.
“The Modi government’s reckless privatisation and its plans to put India on sale now poses huge risks to the Indian economy and our people. The Modi government is now all set to completely exit public sector banks [that are] being privatised — an ill thought out strategy with dangerous repercussions,” Congress spokesperson Supriya Shrinate told reporters at a press conference.
Ms. Shrinate said there was a reason why banks were nationalised in 1969 — public sector banks catered to the banking needs of those sections of society that are never a priority for any private institution.
“These [PSU banks] are not just financial institutions; these are vehicles of social empowerment,” she said.
The Congress spokesperson questioned the timing of the Life Insurance Corporation’s initial public offering (IPO) and said the BJP should now be re-designated as the ‘ Beche jao’ (keep on selling) party. “What is the explanation for the disastrous IPO of LIC, with losses of over $18 billion, almost one third of its valuation,” Ms. Shrinate asked.
The Congress spokesperson claimed that in the past two months, the government had been forced to put on hold its privatisation plans of four public sector undertakings — Bharat Petroleum Corporation Limited (BPCL), Container Corporation of India, Central Electronics Limited, and Pawan Hans limited — because of poor valuation.
“The irony is that the Prime Minister on the one hand is promising to give 10% quotas in PSUs for Agniveers after their four years of service ends, and on the other hand is accelerating sale of PSUs,” she said.
