 Hello and welcome to NewsClick. The central government has decided to privatize Parath Earth Movers Limited, BEML, a defence public sector undertaking. This is a decision which will have far-reaching consequences for our national self-reliance and national security. To discuss this, we have with us MB Rajesh, member of parliament from Palakkad in Kerala. Welcome to the show. You have been a long-standing critic of privatisation in general and in particular the privatisation of defence PSUs. So why are you opposed to the privatisation of BEML? Could you explain it to us? Firstly, one of the units of BEML is in Palakkad in my constituency and I am the president of that BEML Employees Union. So I have the responsibility to take up the issue of privatisation of BEML both as a member of parliament and also as a president of their union. So that is why I took up this issue. Secondly, the privatisation of BEML will have serious implications for our economy and for our national interests. This BEML is a profit-making unit and the government has earlier said that only loss-making PSUs will be privatised. Contrary to their promise, now they are privatising profit-making units including profit-making public sector enterprises including BEML. Secondly, BEML is not an ordinary PSU, it is a strategic PSU. It works in the spheres of defence and rail. So it is a strategic unit and government had promised that no strategic PSUs will be disinvested. So again, contrary to their own promise, now they are privatising a strategic PSU. Thirdly, they are disinvesting 26% of their stakes and along with this, the government has given a reply to me in Lok Sabha that along with the disinvestment of 26% shares, the management control will be handed over to the strategic buyer. And again, why this 26%? According to the Government of India's takeover regulations, any buyer who buys more than 25% of stake for the main shareholder will have to make a mandatory open offer to minority shareholders. That means, in this particular case, this buyer will have an option to buy 20 to 25% shares in addition to the shares they have already purchased. So that means they will get a minimum of 46% and a maximum of 52% of shares. That means the management control will be in either case, this is a strategic disinvestment and beyond that, in any case, the management control will be given up to the buyer. So this is not in the interest of our country. You have in the past written about corruption which has been involved in many of the disinvestment deals which have happened in the recent past or in the recent many years. So could you tell us about that a bit? Throughout the world and in our country, since the policies of liberalizations have been initiated, what we have witnessed is huge corruption in the privatization and disinvestment process of public sector enterprises. In our country, we have the experiences of disinvestment of Sanjore Hotels, this Paradeep Phosphate, VSNL and many other public sector enterprises and in almost all these cases, corruption has been, there has been allegations of corruption, not only allegations, there has been findings given by CAG. I can give you an example of disinvestment of Sanjore which held during Vaspe's time and there was a separate ministry which was headed by Arun Shuri to carry out this disinvestment and in that particular case, a parliamentary standing committee in finance in its report submitted on 6th May 2005 in parliament, they had even recommended an inquiry by Central Vigilance Commission but the Vaspe government rejected that recommendation for an inquiry by CVC. And again, CAG, Controller and Auditor General of India's report was placed in parliament and in that report, CAG found that there has been irregularities and a loss to the extractor by 32 crores. The buyer who bought Sanjore Hotel for 85 crores, he sold it to another company within months and gained 32 crores. So that is why CAG found that there has been a loss of rupees 32 crores to the national extractor. This is just an example. I gave you a long list of disinvestment of various other public sector units. So corruption is involved in this process and this is a modern version of what Marx said as primitive accumulation of capital. This private sector is accumulating capital by obtaining the huge public assets for major prices. In fact, made a specific prediction recently that the control of BEML might end up in the hands of reliance. Why do you think so? Let us see whether my prediction is going to come true or not. Currently reliance, Anil Ambani's reliance is the second largest shareholder of BEML after the government. Now the stage is set for the complete takeover of BEML by reliance. The reliance will acquire this 26% and after the acquisition of this 26% shares, as I explained earlier, they can make a mandatory open offer and they can acquire further shares from the minority shareholders. This will end up in the takeover of BEML by reliance. So let us wait and see. Within few months you can see whether my prediction was correct or not. The workers of BEML are worried about the privatization deal that is going to happen. So could you tell us a little about how the employees of BEML will be affected by this disinvestment? See when the management controls are handed over to the strategic buyer in this particular case according to my prediction to reliance, that means they can decide whether they have to retrench workers or not. There is every possibility for large-scale retrenchment of workers. There is apprehension among the workers that the privatization in the past also this has happened. The workers are afraid and they fear that there will be large-scale retrenchment. Secondly, the huge assets of this company will be sold off or that can be converted by this new management and this is not in the interest of workers, this is not in the interest of that particular company, this is not in the interest of our country. So that is why workers are opposed to this strategic disinvestment of BEML. Just talked about the interest of the country. In fact, the BJP which leads the central government talks so much about nationalism, national interest and so on. But how is defense privatization in national interest? This is a true trust of their so-called patriotism and nationalism. See they have been always talking about the morale of armed forces and defense services etc. Now, BEML is such an industry which provides strategic equipments to our armed forces and defense services. Now, they are privatizing this BEML. This will compromise national security and allowing private participation will have serious implications for our national security and BJP who claims that they are the only custodians of nationalism and patriotism are practicing precisely the opposite. They are the most unrepentant anti-nationals. The disinvestment of BEML and the privatization of defense sector is nothing but an anti-national act. Do you foresee the possibility of the emergence of a military industrial complex like that of the US? Do you think defense privatization will lead up to that? That is a very important issue. Yes, this chronic capitalism which has been promoted by the current Modi dispensation of the center is heading towards a military industrial complex which we can see in the US. That is emerging, that is in the process of evolving in our country also. Now, the reliance is entering into the defense sector. Reliance had no previous experiences in the defense sector. Now, suddenly they are jumping into the defense sector and Anil Ambani has stated that defense sector is going to be a crucial for alliance business in the future. The central government is helping on privatizing a lot of PSUs. But what is the alternative that the left is proposing? Yes, we have an alternative and we are implementing these alternative policies in Kerala where we are in power. I can give you just one example. Instrumentation limited, one of the most important central public sector enterprises in the country and one of its units again belongs to my constituency Palakkad and the central government decided, the Modi government decided to close down this instrumentation unit and in fact the quota headquarters was closed down. When this instrumentation Palakkad is the only profit making unit of instrumentation. That is the only unit which makes profit and this has been making profit since its inception. So, that is again another misconception against Kerala is demolished. The misconception is that in Kerala because of this trade union activity, the atmosphere is hostile to industry etc and the public sector cannot be run on profit. All these myths are being demolished. This IL unit of Palakkad is the only profit making unit and I approached the heavy industries ministry for saving this IL Palakkad but they were not very positive. Then I approached the Prime Minister. I told him that this is the only profit making unit. There is no justification for closing it down. Then he asked me, what is your proposal to save this profit making unit? I told him that there are three proposals. Either you merge it with BHEL or you keep it as an independent central PSU or you hand this one to state government and allow them to run it as a state PSU. Finally, I am thankful to the Prime Minister that he allowed the IL Palakkad to be run as a state PSU and he sought state governments' consent for that. Fortunately, by that time, the left-hand government came to power in Kerala. I met the Honorable Chief Minister, Com. P. Rai Vijayan. Within 10 days, the LDA government took a cabinet decision and indimated that decision to the union government and now the processes are almost over. The state government of Kerala, led by the left democratic fund, is going to take over IL Palakkad and that is for the first time in the history of our country. A CPSU is being taken over by a state government in order to protect it, in order to avoid the closure of that central PSU. This has never happened in the history of our country. So that is the left alternative. When the union government is either privatizing or closing PSUs, the left-hand government in Kerala, LDA government in Kerala, our policy is to open those which have been closed by previous governments and to revive loss-making ones. That is our policy. So is there a prospect of such a solution emerging for BEML as well? What do you think about the prospects of the resistance against the privatization of BEML? See, we will go for all our options. Now, the fight and the resistance is going on at three levels. Inside parliament, we are taking up this issue. I had already raised this issue twice or thrice in Dajya Sabha. Our trade union leader, Komrat Tapansan, has already raised this issue. And the employees in the BEML are united, cutting across trade union or party affiliations. They are united in fighting this. We had a successful strike, a total strike in all BEML units throughout the country on 30th May. And all the defense sector employees are already in the agitation against privatization of the defense sector. So at three levels, we are fighting this privatization. And we will also think about other options. So it is a long battle ahead? Of course. Of course, there is no shortcut. It is going to be long and tough battle. And we are all prepared to fight this long and tough battle. Thank you so much for joining NewsClick. And thank you for watching NewsClick.