SJM wants govt to ‘reconsider’ disinvestment push, flags FDI rise in insurance too
February 15, 2021
Swadeshi Jagran Manch (SJM) congratulated Finance Minister Nirmala Sitharaman for presenting a Budget that “will help revive the economy” from the Covid-19 hit but raised concerns about the government’s disinvestment plans.
“Announcement of carrying out disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, Pawan Hans, Bharat Earth Movers Limited (BEML), manufacturer of rolling stock for Metro etc. is a cause of major concern,” SJM said in a statement issued hours after the Budget.
“The government should reconsider this decision. The announcement of privatisation of public sector banks and an insurance company is also worrying,” he added. “It would be better that instead of doing a strategic investment of these undertakings, efforts are made to improve the performance of these enterprises; and after that only their equity is disinvested in the market,” SJM said.
Union Budget 2021-22 is the Narendra Modi government’s most ambitious plan to privatise government enterprises.
The government will maintain a bare minimum presence in only four strategic sectors, Sitharaman said in her Budget speech. The four sectors are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services.
The strategic disinvestment of the enterprises “created by taxpayers money is not right”, Mahajan said. “Sale through equity route would be a far better and transparent option, after improving their performance,” he added.
The SJM also took objection to the government’s decision to raise the FDI limit in the insurance sector to 74 per cent from 49 per cent, describing it as “worrisome”. “…Increasing foreign dominance in the financial sector is not a prudent step,” SJM said. “This increases foreign dominance over the financial resources of the country and impacts the development of the country.”
Even so, it appreciated the other parts of the Budget. “Despite a fiscal deficit of 6.8 per cent next year, we will be able to not only have high growth of GDP, but also bring back employment opportunities, hampered during pandemic last year and killed in the last two decades due to onslaught of Chinese imports,” SJM added.
“Allocation of more funds for infrastructure, the announcement of new infrastructure projects, the efforts for the revival of industries closed due to Chinese imports, an unprecedented increase of 137 per cent in spending on health, the allocation of additional funds for research and development (R&D) are all welcome measures,” it said.