Former general secretary of AIBCO Thomas Franco.
Former general secretary of AIBCO Thomas Franco.

While the industry praised the government for going strong on disinvestment and privatisation plans, there are some voices against this plan. One such voice is of Thomas Franco who is a former General Secretary of All India Bank Officers’ Confederation.

During the budget 2021, the finance minister proposed to increase the FDI limit in Insurance from 49 per cent to 74 per cent and allow foreign ownership. Questioning the intent of the government in a blog of the Centre for Financial Accountability, Franco said, “Is it not a clear cut plan to sell LIC to foreign companies which have a miserable track record? Relate this to another announcement of the IPO of LIC. This session itself will bring amendments in LIC Act to offer Initial Public Offer. That is the beginning of privatisation of LIC -- the only company which provides 95 per cent of the profit as bonus to policyholders, the company which provides money for one-third of the budget, five-year plans and the company with the highest claim ratio.

Commenting about the decision to privatise, Franco wrote, “We have come across alcoholics selling the property to have their drink. The Central Government seems to be doing similar things. Public Sector is like a house constructed with great ambition. But that is being sold on a platter to a few favourite corporates and using the money for Central Vista, eight-way lanes, discoms, debt servicing etc.” He goes on to add that the high the government gets by doing this is more important.

The government has plans to privatise two public sector banks and one general insurance company as per the union budget 2021 presentation. “From banks, FM estimates Rs 1 lakh crore. So the banks are likely to be Punjab National Bank and Bank of Baroda with a market capitalisation of Rs 41,386 crore and Rs 37,172 crore. Ultimately more banks will be sold.”

Franco further claimed that in non-strategic sectors all CPSEs will be privatised or closed. “The PSEs (private sector enterprises) provide every year more than the Rs 1.75 lakh crore — target for disinvestment. Why sell the Golden Goose? The interest payments is Rs 8,09,701 crore and fiscal deficit (loans to be availed) is Rs 15,06,812 crore. Already, our external debt of Rs 3,82,829 crore is too high. It is time we come out of the International Monetary Fund (IMF) and World Bank and use huge money with banks which are not given as loans.”

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