Important questions that confront us, arising from the Report “PRIVATISATION AN AFFRONT TO THE INDIAN CONSTITUTION” by the Peoples’ Commission on Public Sector and Public Services


By Dr. Sanjeewani Jain, Vice President, Lok Raj Sangathan

The Peoples’ Commission on Public Sector and Public Services consisting of a large number of public-spirited individuals has brought out an interesting report in November 2021, titled “Privatisation an Affront to the Indian Constitution”. In the first part of this article, many of the important points in the report are brought out. In the second part the author raises many questions and challenges that need to be considered and discussed that this Report as well as the experience of the movement against privatisation (and others fighting for various people’s causes) have thrown up at us.


The Peoples’ Commission on Public Sector and Public Services should be commended for bringing out an interesting report in November 2021, titled “Privatisation an Affront to the Indian Constitution”. A large number of public spirited individuals (see the accompanying picture) from different fields – eminent academics, jurists, former administrators, trade unionists and social activists constitute the Commission, with Dr. Thomas Isaac, Former Finance Minister, Kerala and Mr. E. A. S. Sharma, Former Secretary, Ministry of Power and Economic Affairs, Government of India as the Co-Chairs. The report published is an Interim Report 1, focusing more on the Constitutional aspects of the privatisation drive. The People’s Commission has brought out a subsequent report focusing on the case of LIC, which we have put up on this site.

As is mentioned in the Foreword by Thomas Isaac & E.A.S. Sarma, Co-Chairs of the Commission, “the gist of the arguments in this opening initial report of the Peoples’ Commission is that the current policy of the Union Government for privatisation of the PSEs is tantamount to negation of the social objectives of the Constitution as stated in the Directive Principles and constitutional guarantees on affirmative action.”

The Foreword also brings out an important point that the Bombay Plan (1944) was drawn up by the representatives of business interests. This of course means that it was in consonance with the interests of big Indian business houses. That is why the public sector was established – money gathered by the government from the people at large by way of both direct and indirect taxes was used along with the labour of countless workers to set up “public sector units that would establish basic infrastructure and long gestation basic industries that required heavy investment… The state was also to institute an appropriate regulatory framework for an import substitution strategy of development.”

An interesting point mentioned is that “In fact, the Bombay Plan had not envisaged open ended growth of public sector or planning. As the corporates matured and gained experience, the public sector was to be eventually transferred to them or in other words privatised.”

The brazen manner in which the privatisation campaign is being lately carried out with the intention of destroying small enterprises and handing the wealth of the country to rich corporate houses, Indian and foreign, at throwaway prices is described in the Preface by Mr. M.G. Devasahayam, Chairman, Coordination Committee, People’s Commission on Public Sector and Public Services.

The Report goes on to document how the period of the pandemic has been used by the government to tremendously enrich the monopolists further, causing greater devastation in the lives of the toilers. “In 2020-2021 Mukesh Ambani’s net worth was Rs. 7.18 lakh crore; Gautam Adani’s net worth was Rs. 5.06 lakh crores. Other super-rich have also increased their wealth by 75 to 85 per cent within a year.” Further, the Report considers in some detail how the government’s policy to promote private vaccines manufacturers at the cost of the PSEs has played havoc with people’s lives, causing needless deaths and devastation. It reveals that Although Covaxin was based on work done at the National institute of Virology and other laboratories of the Indian Council of Medical Research, the profits were reaped by the private sector Bharat Biotech International Ltd.

It also considers other cases like the Indian Railways, banks, Air India, etc. It goes into how the National Monetisation Pipeline (NMP) will further concentrate wealth in the hands of the richest monopolists by handing over public assets to them for what amounts to a robbery of the people.

The summation of its findings can be expressed in its words: “While disinvestment offers a bonanza for the private players who will secure easy access to valuable machinery, skilled human resource pool, scarce natural resources in some cases, and land assets of immense value, it is the public at large and the public exchequer in particular that will be the losers in the ultimate analysis.”

Thus, the Report gives a categorical NO to the question of whether privatisation of the public sector and monetisation of assets subserves the common good. This is not at all unexpected – life experience of crores of people – workers in Public Sector Enterprises (PSEs) as well as users shows that. It further shows that all the rosy objectives outlined in the Constitution by means of Directive Principles have been violated by the privatisation policy. Inequality has soared, working conditions have become terrible, monopolisation has tremendously increased and people’s money has been going into the hands of capitalists at increasingly faster rates. In short, losses have been nationalised and profits privatised.

Vital Questions arising from the Report:

The Report has quoted instances where the Supreme Court has come out with pro-people judgments. This raises fundamental questions that need to be answered:

  • How many people can afford to approach the Supreme Court? How many pro-people judgments has the Supreme Court delivered?
  • The Supreme Court does not have executive powers to implement its decisions.
  • When the judges are appointed by the Executive, how will they be accountable to the people?

The report mentions that Article 37 of the Constitution in Part IV says that the provisions contained in Part IV shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. (emphasis added)”

And further, “Our constitution is unique in that the policy directions of building a social order for the promotion of the welfare of the people have been enshrined in it. Moreover, a duty has been cast on the state to apply these principles in making laws and policies. This report demonstrates that the state has reneged on this obligation and duty to secure a social order for the promotion and welfare of the people.”

The Report demonstrates how “Apart from the fundamental infirmity of the whole disinvestment process being unconstitutional, there are individual laws that stand violated in the process of disinvestment that is being followed at present.” The laws violated by the state include the erstwhile Land Acquisition Law, provisions of the Panchayats (Extension to the Scheduled Areas) Act, (PESA) and the Forest Rights Act legislations.

This in turn raises some vital questions:

  • Why is there no mechanism to ensure that the Directive Principles in the Constitution are implemented in practice?
  • When the Executive violates them, (as it has been repeatedly doing over the years, irrespective of the party in power) why is there no mechanism to bring it to book and mete out exemplary punishment?


An interesting point brought out by the report is how the Public Sector Enterprises themselves have been taking anti-worker actions. “Moreover, when a public undertaking outsources its services – for instance, the Indian Railways outsourcing catering services – the transfer of these activities does not bind the contractor to any of the legal commitments that the Railways as an entity is committed to. For instance, in 2018 the Railways had 13.11 lakh employees on its rolls (according to a reply by the Government in the Lok Sabha in January 2018). However, in the preceding five years the Railways had employed 7.5 lakh workers on contractual terms.”

This brings us to the same point:

  • Who is the Executive accountable to?
  • The bureaucrats who head the PSEs are certainly not accountable to the people. They have a vested interest in dancing to the tune of the government of the day, which in turn is not accountable to the electors, but which has come to power using the unimaginably high funds that the big corporates have provided the leaders of the party (or parties).

In sum, we can say that the Report does a good job of elaborating how governments of various parties have worked to benefit the capitalists at the expense of all of us, the people of our country. It has also raised vital questions that need to be mulled over, debated and discussed in order to chart out our path ahead.




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