On the 50th Anniversary of India’s independence it is important that we should understand the concept behind the term liberalisation,  which in many of its manifestations is nothing more than `colonisation without physical occupation’. The coinage that the term liberalisation has got in our daily discourse needs to be demystified. The impetus  for a  new economic paradigm emerged from  the structural adjustment programme of the World Bank. The Bank is not a neutral international organisation. It is, like any other  bank accountable to its share holders. The World Bank  is dedicated to creating profits for its principle share holders For every  dollar invested in the World Bank  by UK Government, UK companies receive $1.85 in procurement contracts to carry out World bank work. French companies earn  $ 1.82, USA  companies earn $ 1.80, German companies earn $ 1.51 and Japanese companies earn 1.01 (- source Treasury Secretary Lloyd Bentsen’s testimony to the US Congress. Like its predecessor, the East India Company, it offers a few million dollars as loan, appoints consultants and seeks and obtains all manner of  concessions and restructuring  of  industry and  the  law in the country concerned.

The most important  concession is the demanded  to privatise the public sector. Privatisation is a step in the structural adjustment process. It is one of the themes that is of the  greatest interest to industrialised countries, because it opens up the possibility for investment  as well as markets for their corporations in a much more direct way.

The very idea of bundling the public sector into a single category, then denigrating it, playing up its shortcoming or  the complaints of consumers and  then presenting privatisation as  not just an alternative but as a panacea  is an ideological game played by self serving  interests including the Indian  press and the foreign dominated television media. The biggest votary  for this argument is the vocal middle class, which expects service of international standards, but has neither the capacity nor the will to pay for such a service.

Take for example MTNL. Ten percent of its consumers contribute ninety percent of its revenue (In the entire All India  DOT network, 16 % contribute 60 % of the revenue). Simple common sense  will suggest that `Cherry picking’ by the  private sector will ensure that the ten percent do not get any service at all not to speak of international standards.  Or the service provided by Indian Airlines which  operates three types of routes. 1. Those that  make profits 2. Those that make losses but do not constitute cash losses and 3. Those that make cash losses. a) Operation to tourist destinations such as Agra, Khajuraho, Varanasi, Bhuwaneshwar, Jaipur, Jodhpur, Udaipur, Aurangabad etc.  - all these routes are short sector operations and are uneconomical. The  losses are operational cash losses.  b) Operations to remote and difficult areas such as the entire North Eastern region, Leh, Port Blair, Bhuj etc. in public interest - all these routes are uneconomical and cause operational and cash losses. c) operation to uneconomic  destinations which are non tourist and not remote but in public interest for reasons including political sensitivity. d) Concessions to students, armed forces personnel, blind persons, Cancer patients etc. e) Haj pilgrimage on concessional rates which meet social obligations. In the month of April 1993, the total profit of Indian Airlines  from the above mentioned profitable routes was Rs. 10.66 Crores and this was off set by cash losses on routes making operational losses to the extent of Rs. 5.47 Crores. The routes that contribute only towards meeting the fixed costs contributed Rs. 5.35 Crores. While the Prime Minister find it prudent to ridicule, in a foreign country, the policies of the Government and demands the opening of the Indian skies, he does not explain what will happen to all the destinations on the loss making routes. Similar examples can be given of every other public services that  the public sector provides.

Bharat Electronics Ltd. has been subject  to US sanctions because it provided equipment to the Departments of Space and Defence. In a country which is so vulnerable to economic sanctions does self reliance make economic sense ? It is for self reliance that Hindustan Copper was set up to mine inferior quality ore that would not be touched anywhere else in the world. But its losses and its inability to compete are exhibited as examples of inefficiency. Is profitability therefore a neutral measure? Does it cover all the expectations of a nation or man economy? Is profitability broad enough a  measure of the complex goals and objectives that  an ex-colonial country sets for itself ? While opening the entire energy sector to multinations, perhaps the comments of Noam Chomsky deserve attention:
"George Kennan, Chief Planning State Department of Policy Planning, proposed in 1949 that US control over Japanese oil imports would help to provide "veto power" over Japanese military and industrial policies. This advice was followed. Japan was helped to industrialize but US maintained control over its energy supplies".  (Deterring Democracy)

The next generalised attack against the public sector is its alleged lack of profitability.  The operating profits to sales ratio of BHEL (1994/95) and  is the second highest. (the highest being GE which makes large profits on its non banking financial operations)  This inspite of the fact that BHEL’s products are almost entirely investment goods, with long production cycles, requiring large investment and higher working capital margins. MNCs have a sizeable portfolio of consumer durable and consumer goods where the profit margins are higher. But to the policy makers this is a matter of no consequence. Neither does the  fact that South Asia and particularly India offers one of the largest markets to the MNCs  whose export intensity is  between  88.7 and 58 %.  It is also  a well known and legally established fact that in this industry cartelisation is widespread. A single large share holding of an MNC or a combination of them directly or through fronts is enough to distort or reorient the priorities of BHEL. The example of ITC - BAT more than establishes this.

The other serious myth is that in public service, as long as there is a regulatory authority the MNCs  can be reined in. Let us examine the experience since 1991. Two example are sufficient.  Under Section 29 of the Electricity (Supply) Act 1948, CEA and CEA alone has a statutory obligation to give techno - economic approval to power projects. Besides this the Act provides that CEA is the statutory adviser to the Government of India and not a subordinate office of the Ministry of Power. However, for the first time since independence, and in clear violation of the law, in the Dhabol Power Company (ENRON) case, the minutes of CEA clearly establish that CEA was forced to give technical clearance and that the Ministry of Finance arrogated upon itself the power to give the economic clearance. Minutes of 118th  meeting of CEA Dt. 12. 11. 93 ( para 1.1) states

"Ministry of Power might be informed that in view of the fact that (I) the tariff for power from the project was a negotiated one and not in conformity with GOI notification and not related to capital cost and (ii) cost of power has been looked into by the Ministry of Finance, only the technical aspects of the scheme were examined by CEA and found to be in order".

And Enron not only refused to give details of the capital costs but the CEO of the ENRON Ms. Rebecca Mark had the audacity to state in a letter (dated 26th August, 1993) to the then Chief Minister of Maharashtra, Shri Sharad Pawar

 " The remaining concerns seen to reside with Mr. Beg Member Planning for Thermal plants. He continues to hold up project approval…. No one from the Ministry of Power in Delhi has given direction to Mr. Beg to move forward on the issue" (emphasis added)

The Secretary Civil Aviation, in his submission to the Standing Committee on 9th June, 1993, admitted that permission could not be given for "Scheduled air transport services" as that would be contrary to law. The said Secretary also admitted that such Air Taxis were operating a schedule and everyone knew about it and added "How does one know about it in the Ministry unless the facts are brought-out that somebody is violating the law?" (Report: 1993 Pr. 2.1-2.2)

Both the illustrations  suggest that the bureaucrats in the Government of India do not hesitate in the least in violating or manipulating the laws of the land to accommodate vested interest, whereas they are constitutionally charged with the obligation to enforce the law and regulate. The attitude of Ms. Mark clearly suggests that MNCs are arrogantly aware of this.

Conclusion
Some concern should be shown for the objectives for which millions of people make sacrifices for freedom. When a responsible organisation like the 5th Pay Commission defines the purpose of Government, "ensure that there is a level playing field for both domestic and international players. At the same time, it would have to play a major part in promoting infrastructure and social services" for good measure, commission has added, " as also in combating poverty and unemployment." Consequentially, the commission states, "from a mere controller and regulator, (public services) have to get converted into catalysts, promoters and facilitators" , then it is time for serious introspection. The question is can a scam ridden body politic and  tottering Government do such introspection and defend public interest. This concern reaches levels of unbearable anxiety when the role of the Parliament  reduces to little more than a spectator. Hundreds of thousand of Crores have been sunk into the Power, Telecom, Civil Aviation sectors, these sectors also involve millions of consumers and employees but laws governing them are amended by the executive through an ordinance creating a fact accompli for the Parliament. Worse still Parliament passes enabling legislation leaving enormous scope for the Executive as for example, on the question of capital cost of power plants the principal notification was issued in March 1992, amended twice in 1994, twice in 1995, and four times in the first half of 1997. Each of the amendments has implications that run into hundreds if not thousands of Crores of Rupees. Let us not forget that freedom is a responsibility not a privilege.