Against FDI in Railways, Insurance and Defence: Item No. 9 – Explanatory Notes – Charter of Demands – All India Strike 2nd Sep, 2015

Against FDI in Railways, Insurance and Defence: Item No. 9 – Explanatory Notes – Charter of Demands – All India Strike 2nd Sep,
2015

2015 SEPTEMBER 2nd ALL INDIA STRIKE – CHARTER OF DEMANDS AND EXPLANATORY NOTES

CHARTER OF DEMANDS.

The first Industrial Policy resolution of Free India was notified in 1948. The
defense production specially arms and ammunition, Atomic Energy and Railway
Transport were the three sectors where private entry was barred by the
Resolution for the sake of National Security and people’s welfare. In 1956, the
Government of India revised the resolution to bring in 17 Sectors in the
exclusive realm of Government. In 1991, to usher in the LPG policies, Narasimha
Rao Government amended the resolution to de-reserve nine of the seventeen.
Railways, Defence production, Atomic Energy continued to be barred to private
Entrepreneurs. The NDA Government in which BJP was the predominant partner
further liberalized the resolution in 1999 but still retained the Defence
production, Atomic Energy and Railways within the exclusive Governmental Sector.
The Defence production went in for partial privatisation when the Government
allowed FDI to the extent of 26% whereby the foreign Arms manufacturers were
permitted access to the vital Defence sector, disregarding the national security
perspective. In all developed Nations, Arms manufacturing is a business intended
to make profit. In other words, war was and is business to them and war related
agony to be the market for profit. Defence production for them was not only for
the purpose of defence of the country but for waging offensive wars also. What
is now decided by the present Government is to make Indian defence production on
line with the international standards; i.e. attune it to make profits through
export for which war perception and hysteria has to be created as a marketing
technology ..Eventually this will lead to closure of Department controlled
Defence production units, unable to face the unscrupulous competition from the
Transnational Corporations driving thousands of workers to poverty and penury.
The present decision of the Government to increase FDI in defence production to
49% will leave no room for the existing Defence production unit to survive.

On 22nd August, 2014, the Modi Government amended the1991 Government of India’s
Industrial Policy Resolution replacing the words “Railway Transport” as “Railway
operations” . Simultaneously, they also announced the induction of 100% FDI in
Railways including operation, construction, design and maintenance. Contrary to
the general perception, assiduously generated, Railways is not a loss making
entity in India. The profit after dividend in FY 2013-14 was Rs. 7942 Cr. And
the dividend paid to Government was Rs. 7839 Cr. The social obligation cost was
of the order of Rs. 21.391 Cr. which the Government has not paid back to
Railways at all. In other words, the Railways in the year 2013-14 have made a
clean profit of Rs. 29333 Cr.

British India made the first experimentation of private operations of Railways
by offering a guaranteed 5% return on investments. Neither the Railway net work
was expanded, nor were the Government or the customers benefitted. British
Government had to ultimately rescind its decision and took over the Railway
operations in 1924.

Neither FDI nor the PPP will help the Railways. The DMRC had to ultimately take
over the Airport Express Line and run it, for the Reliance who undertook the
construction on PPP model found it not profitable. The induction of FDI and the
consequent privatization of Railways will make Rail journey beyond the reach of
the poor people of India. In the bid to maximize profits, Railways will be
compelled to charge enormously for its services. The unprofitable lines will be
closed down. No social obligation will be undertaken by the Railways. Lakhs of
Railway workers will be compelled to seek employment elsewhere.

The Committee set up by the Government to suggest methods of reform in Railways
under the Chairmanship of Shri Bibek Debroy submitted its report in March, 2015.
The voluminous report has drawn the roadmap for eventual privatization of
railway operations. In its core recommendations, it has suggested that there
must be a change in the institutional arrangement between the Railways and the
Government and introduce competition in the functioning of the Railways. In
other words, Railway operations must be open to private enterprises so as to
have competition. The Committee also inter alia suggested that the policies (and
especially the fare fixation) must be left to a Railway Regulatory Authority and
the Government should be divested of its present power to fixing or restricting
the railway fare. One of its other bizarre recommendations is to introduce the
bullet bond system for payment of retirement benefits to the employees with a
lock in period of 20 to 30 years. i.e. the Retired personnel of Railways will
provide the funds out of their legitimate dues after serving for 30 to 40 years
to enable the Railways to make investment.

Railway will become a loss making enterprise in the days to come as is the case
with the Railways in most of the advanced capitalist countries of Europe. The
present decision of the Government to have 100% FDI in Railways, to say the
least, is an unpatriotic act in search of profit. The Government of the day has
thrown a challenge to working people of the country in general and Railway and
Defence workers in particular.

The Task force set up by the Government under the chairmanship of Shri
T.S.R.Subramaniam, former Cabinet Secretary to the Government of India, has
recommended to convert the postal department into a corporate entity, perhaps on
the lines the Telecom was made into BSNL,VSNL and MTNL. The Company so formed
will have five subsidiary arms. The Corporatisation route may not bring about an
immediate reduction in the manpower, but eventually will. The entire social
obligations will be thrust upon the new company while the private players will
take the creamy part of the communication business as was done in the case of
Telecom. In the longer run, the Public Sector Company so formed would be made to
incur losses and public opinion generated for its closure. Let there be no
illusion; the Government’s decision is to privatize and make available the huge
infra structure built over centuries of postal operations to the private
enterprises ( As they eye only the prime real estate in the possession of the
Postal Department) as also to hand over the lucrative business of Postal Banking
and Postal Insurance to Transnational Corporations in the Banking and Insurance
sectors.

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