 On August 23rd, Finance Minister Nirmala Sita Raman announced the National Monetization Pipeline. Now, this is a plan which over four years is expected to bring 6 lakh crores for the central government. There's been a lot of responses to it, many of them lukewarm and slightly weary because of what might happen with this project. You're watching NewsClick and we have with us Senior Journalist Paranjay Guha, Thakur sir to talk about this. Paranjay, thank you so much for joining us. Thank you Prashant. So, first of all, a definitional question because you of course heard of demonetization. But what exactly is the national monetization pipeline? And you also of course heard of a lot of privatization initiatives over the past many years, very patchy record there as well. But how does this NMP, how does it stand apart? Okay, to use very simple language, perhaps a little simplistically, let me say, monetization is not privatization. Therefore, the ownership of those assets will remain with the government. But private players, private companies, private groups would be given an opportunity to get a rent on these assets, to obtain a rent of these assets. Therefore, monetization. Now, this is extremely controversial. I would say it may end up being even more controversial than the privatization program of successive governments in India and of course across the world. But before we go further Prashant, let me just give a tentative list of the kind of assets. Now, these assets are national assets. They belong to the people of this country. Just to give you an idea of how huge that scale is. You mentioned 6 lakh crores. I mean, that's 6 trillion rupees. That's one and a half lakh crores per year for the next four years, by which time an election will take place, remember? And when you compare this number, that is 6 lakh crores, look at the country's GDP or gross domestic product. India's GDP is currently in the region of around 200 lakh crore rupees. In fact, it's a little more than 200 lakh crore rupees. So, what are these assets? Here is a list, a representative list. It includes 26,700 kilometers of roads, almost 29,000 kilometers of power transmission lines, 6,000 megabots of power projects, hydroelectric and solar projects, over 8,000 kilometers of natural gas pipelines and almost 4,000 kilometers of petroleum products. Pipelines which are used to transport petroleum products like petrol, diesel and so on and so forth. That's not all. You are looking at warehousing, publicly owned warehousing assets. And you are here looking at a stupendous number, 21 million tons, sorry, 21 million metric tons. I mean warehouses that can store such a lot of, and that's not all. 400 railway stations, 90 passenger trains, 265 goods sheds. And then you have the Konkan railway. You have a dedicated freight corridor. You are looking at then telecom assets, telecommunications assets. You are looking at about 286, 2.86 lakh kilometers of optic fiber, almost 15,000 towers, telecommunication towers, 25 airports, 31 projects in 9 major ports along India's coastline, the west coast and the east coast. And of course two national stadia. I suppose it excludes the Narendra Modi stadia in Gujarat. Yes, yes. I mean this is just to give you an idea that with one stroke of the pen, without any prior consultation, leave alone, you know, mentioning it in parliament and there was no consultation with any of the stakeholders. And let me point out to you what has been commented by a lot of people, including people who are far from left. Former finance minister, Mr. Chidambaram P. Chidambaram, senior journalists like Mr. T. Nainan, a business standard and many, many others. The big, big issue is that you're saying you're going to collect, you know, collect 1.5 trillion rupees every year. But what is the net addition? Have you calculated what, quote, unquote, a rent that public organizations, public sector organizations, government owned organizations are already getting as rent? And what is the additionality? You've just given a big number because it looks very impressive. This is typical of the Narendra Modi government, but you haven't, I mean, if you look at the fine print of those documents, you don't know what is the addition, that what is the additional rent you hope to get by this scheme. Absolutely. Right. And apparently in this context, the key question is, is also looking at the government's privatization record over the past many years. And we see that this involves leasing out, like you said, a lot of these facilities to private players. And we're already in a situation where there are a few corporates which have benefited massively, not even a lot of corporates, very few corporates which have benefited massively from, say, privatization from the policies of the government. So one of the criticisms has been that this will actually enable more of that practice to continue, more of these trends will become, these trends will solidify, monopolies might emerge. So do you see that possibility strengthening? There is definitely a distinct possibility that a few large corporate conglomerates and large players would benefit the most. I mean, it would lead to monopolies or duopolies or oligopolies. And we're already seeing how some of that is happening. Let's take a few steps back. The word privatization has always been a bit of a dirty word in India. I mean, right through the 90s, even after the economic liberalization of 1991, in fact, it was the watch by government, not the 96 watch by government, but the 98 watch by government which actually started India's privatization program with hotels like Centaur Hotel, ITDCs and a couple of other projects. But, and of course, notably the Indian Petrochemical, IPCL, Indian Petrochemicals Corporation Limited, which allowed a private group, in this case Reliance and the Ambannis, to get a dominant share of the petrochemicals market. And even now they have it. And that was Mr. Arun Shauri when he was the minister. But the point is, even during Mr. Vajpayee's, I tell you Vajpayee's government, they called it disinvestment and then they called it strategic disinvestment. They didn't like the word privatization, but now that's very, very clear. So even though they still kind of don't call it privatization, they call it the divestment or the disinvestment program of the government. Every year in the recent past, we've seen the targets are way above the actual performance is a small proportion of that. Let me give you two examples to point this out. In the last two years, the last year before last, during the pandemic, 2021, the budgetary target was 2.1 lakh crore rupees, the disinvestment target. The actual amount was 32,000. Now you can say this is a small amount, but if you go back in time, you would see every time there's a shortfall. Now in the current financial year, which started on the 1st of April, again, you have a lower target, 1.75 lakh crores, but the chances of it being achieved are, I mean, I can give it to you today, though much of the financial year has still left, it ends on the 31st of March, we won't be near the target. I mean, look at the difficulties and the challenges that despite the best efforts of the Narendra Modi government, who ideologically are right of center and very, very, they don't mince their words as much as previously. They want privatization. What the record has been? Look at Air India, look at Bharat Petroleum Limited, look at Container Corporation, look at Pawan Hansa helicopter company, go back in time, IDBR, the Bank of the Industrial Development Bank of India, the Shipping Corporation of India, and the initial public offering of shares of the Life Insurance Corporation. I mean, at best, the progress has been halting and slow, but surely, even by the admission of this government, they have a long way to go. I mean, what is very clear? This government is desperately strapped for cash, and therefore, they are literally boning, I won't say selling, but boning the family assets. I mean, this would be a somewhat simple, perhaps somewhat simplistic way of describing the NMP or the national monetization pipeline. Absolutely. Of course, there are two angles here. One is the fact what you mentioned that the government's own numbers are clearly very unrealistic. The second question is even the wisdom of this direction of the policy itself, because what we also see is that as governments across the world lose more of these national assets, their ability to intervene in times of crisis actually declines, and what we're also seeing, of course, is that the government is unwilling to spend beyond a point because of its determination to stick to fiscal deficit targets. So, are we also at a position where there is a crisis of thinking in terms of the economic policy of the government? I mean, we're not probably right now in that position. No. We've been for a while. You know, Prashant, as has been pointed out by a number of observers, including from our finance minister, Mr. Chidambaram, we in this country seem to be going in a direction which is diametrically opposite. A large number of countries, including countries they call themselves, you know, at least the governments firmly or ideologically wedded towards free market capitalism, call it what you like. Take the railways. It's a classic example. Britain, starting from Margaret Thatcher's time, started the process until there was an outcry. Not only were the trains not running on time, the accident record or the safety record had plummeted, and we reached a situation where the British railways said, look, we actually have to go back. So instead of privatization, you have whatever, deep privatization, nationalization, call it like, and this is the story which is similar in France, in Italy, in Germany. And none of them are so-called socialist or communist countries. You look at the track record of what's happened in countries like the United States, in Australia. Distinct attempts have been made to rein in the large digital monopolies through various means, whether you talk about Alphabet, that is Google and YouTube and the Android operating system, whether you look at Facebook, which is Facebook and Instagram and your WhatsApp, whether you look at Amazon. I mean, the lady, the woman who wrote about the monopoly of Amazon and the structural Lena Khan, she's now heading the FTC, the Federal Trade Commission. When you look at, go back in time, when you look at not just the U.S., when you look at South Korea, the way they reined in the ship, I'm sorry baby, my pronunciation is wrong. Look at the way China has taken action against the giants, the Alibaba's and the jackmars of the world. So we seem to be going in just the reverse direction. I mean, instead of reining in monopolies, we seem to be wanting to create them. So basically what we're seeing is that, under the guise of exploiting underutilized government assets, what we're doing is basically creating huge markets for private players and over time, which also causes the risk of increase in prices, many similar possibilities. Also possible loss of jobs. We are not clear whether the private players who take these assets or who are given these assets on rate, what will be the impact on employment of those belonging to the schedule cars, the schedule tribes, the OVCs, the other backward classes we don't know about the job situation like. The short point is that too many, too much that has been left unsaid and questions which have not been answered. Whether it be banking, we actually saw in the United Kingdom also the privatization of the banking industry, what it led to. You've rightly pointed out likelihood of a price rise and look at the end of the day, I think I go back to a point. Not only was there no consultation with the stakeholders, that includes the employees unions, the office's associations. I don't think there was any even discussion involved. So this was a scheme that our Honorable Finance Minister, Mrs. Nirmala Sitaraman, literally, I mean, maybe it was being planned for a long time, but it was foisted on the nation all of a sudden, literally overnight. And when you're looking at such an important policy with such important consequences for the economy, I don't think it should be done in this manner. I mean, I'll just give you a quote from a recent editorial, an article that TN9en wrote, TN9en, a business standard. And I'll just read. The Modi government, in short, the Modi government, and this is its concluding paragraph, has embarked on an obviously suboptimal course across a minefield. Now, what I'm saying is, and then he concludes by saying one could compliment it for undertaking the task regardless and for setting itself up to be measured against stiff targets. But given the record of past blunders and underachievements, the vulnerable abilities of India's eroded institutions and the manifest influence of stigmatized capital. This is a phrase used by the former chief economic adviser to the government of India, Mr. Dr. Arvindan Sirbamaniam. During the Modi government, he called it stigmatized capital. And Mr. TN9en concludes what the country might get is yet another school for scandal. And unlike in the original, not as comedy. So I mean, this is the view of people who are otherwise not inimical to privatization or liberalization. But the way this has been done is absolutely scandalous. At one last point, you know, the Indian economy is in a bad shape. Is this the way you're going to revive it? I mean, look, for six successive quarters, the rate of growth of India's gross domestic product had been coming down, okay? From April to June 2018, it was 7.1%. It came down to 3.1% in January to March 2020. Then you had the lockdown. Then you had for the first time in the history of this country what is called a technical recession. Technical why? You're using American yardsticks to talk about negative growth in GDP for two successive quarters. So in the April to June 2020 period, you contracted by almost a quarter, 24.4%. And in the following quarter, which is July to September 2020, that's correct, 24% and then around 8%. And you had a growth rate which was negative for the full financial year. And despite what the government is claiming, things don't look good at all. I mean, the government is saying all kinds of things. The RBI has one set of figures. The government of India has one set of figures. But the Indian economy is not at all in a good shape. And personally, my feeling is that this so-called national monetization pipeline is going to make things worse. And it also indicates the desperation of the Narendra Modi government in finding ways to improve the economic condition. And we know how it's not just the poor. The middle class, the gap, the inequalities in this country is called. And it has these inequalities which are already very, very present, very much there have now widened and deepened. And this will not help at all. It'll make things worse. There's every indication that the situation could worsen. Thank you so much, Paranjeev, for talking to us. Thank you very much. That's all your time for today. Keep watching. Just click.