Dismantling A Legacy
From about the end of the 1960s to the mid-1970s, nationalisation had tragically become the magic wand which would enable the Indian State to banish poverty by achieving rapid economic growth. It was the mantra to end all mantras, the perfect weapon to capture once and for all the commanding heights of the economy. Even usually sober and sensible economists and bureaucrats swore by it. Why, in 1973, the government even nationalised the grain trade. Fortunately, the experiment was quickly abandoned. The mind boggles at what would have happened if it hadnt.
Beginning with the nationalisation of banks in 1969, oil companies in 1970, coal in 1973, general insurance in between, and textiles in phases right up to the early 1980s, the government raced headlong into an economic cul-de-sac. The result by the end of the 1980s was the coming into being of gigantic public sector monopolies which, in due course, developed a vested interest that has proved no less powerful than private sector monopolies would have. Politicians, businessmen and bureaucrats, in a laboratory proof of Michael Kaleckis theory of intermediate regimes, came together under the giant umbrellas of these monopolies to milk dry the very state which had created them.
The private coal companies were accused, at the time of their nationalisation, of a variety of sins, ranging from exploitation of workers to poor mining practices. But a quarter century of State control has resulted in the continuing infamy of Dhanbad, still raging fires under Jharia and corruption on a scale unimagined in 1973. Private mining can only begin to improve mattersprovided there is effective policing of mines safety and of mining practices, and a transparent process by which mining leases are handed out. If these conditions are not met, the remedy could once again prove worse than the disease.
Happily, at least the ideological divide has been crossed. The private sector can now participate in the oil industry, in banking, steel, telecoms, broadcasting, hopefully insurance, and a host of other industries which had been thought to be `naturals for the State. The de-nationalisation of coal may well be the last nail in the coffin of the half-baked ideology which had promoted this belief, partly out of political expediency, partly out of impatience and party out of genuine good intentions. The supreme political irony is that it should be hammered in by a government which has in its fold the same Communist Party of India which egged Indira Gandhi to nationalise, nationalise, nationalise.