Bank officers' apex body AIBOC on Wednesday criticised the government's plan to privatise public sector undertakings in several sectors.
Finance Minister Nirmala Sitharaman on Sunday announced the government's intention to privatise public sector enterprises (PSEs) in non-strategic sectors. The announcement was part of the over Rs 20 lakh crore economic package to stimulate the economy reeling under the impact of COVID-19.
In a statement, the All India Bank Officers' Confederation (AIBOC) said the package contains very little in terms of fiscal stimulus and tries to inflate the package size by adding liquidity infusion measures with that of fiscal steps.
"Most disturbingly, the Finance Minister has announced in unambiguous terms its intention to privatise PSEs and assets across sectors, which far from promoting economic self-reliance will destroy the very foundation of our national economy," it said.
PSEs have played a major role in building the nation and supported the country in many crisis situations unlike fair weather friends, it said, adding that it is public sector banks who have been in the forefront of implementing various government schemes.
It said while the "strategic sectors" where at least one PSU would be permitted have not been notified yet, it is clear that many of the 244 operating CPSUs have been targeted for privatisation.
The experience of the attempted privatisation of Air India has already shown that even suitable buyers are not available as on date, it said.
The same Air India has, however, continued to provide yeoman service in ferrying stranded Indian citizens from foreign countries during this difficult period of the coronavirus crisis, AIBOC said.
Criticising the stimulus package, AIBOC said the finance minister has relied on further liquidity infusion and chided the public sector banks for parking funds back with the RBI.
"What the banks lack today is not liquidity but the willingness of the borrowers to borrow and spend/invest, because of the deficiency of aggregate demand. Credit off-take would increase only when investment and consumer spending rises," it said.
"Given the recessionary trends, this would first require public investment and spending, which is why a fiscal stimulus is an absolute need of the hour. Only a substantial surge in the public investment and spending can ensure crowd-in funding through the route of private investment," it added.
The body also recommended direct cash transfers to migrant workers and other vulnerable groups.
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