A national convention of workers/officers of public sector financial institutions (FIs) and prominent economists held in Delhi recently has demanded that public sector FIs be protected and nourished. Its declaration lent support to a campaign launched to protect the economic sovereignty of the nation and urged political parties and all concerned to arrive a consensus on a list of demands.
Retort to Panagariya
Importantly, the convention called out former NITI Aayog Vice-Chairman Arvind Panagariya’s suggestion that all political parties commit themselves to the idea of privatisation. Panagariya had made a strong case for the privatisation of public sector banks in India with the exception of State Bank of India.
Having quit NITI Aayog to resume a teaching career Columbia University, Panagariya had said that political parties serious of forming the government in 2019 should include the proposal in their manifesto.
But this is exactly what the Delhi declaration is seeking to target. It said emphatically that public sector FIs need to be strengthened in order to defend the financial freedom of the nation. This alone would ensure that the interest of common man is taken care of by protecting the economic sovereignty of the nation at large, the declaration said.
The public sector character of financial sector institutions needs to be maintained at any cost. The government should unequivocally declare that it will protect the public sector.
Economic sovereignty
Priority should be given to protect the freedom and independence of the country from the onslaught of financial capital. Reasonable control must be brought on the entry of speculative capital as well. Needs of the poor and weaker sections have to be brought back to focus, and therefore the concept of social banking. Big loan defaulters must be named and wilful defaulters chased down.
All unreasonable and exorbitant service charges must be withdrawn. Severe conditions being imposed for advances extended to the poor, weaker sections and petty farmers and producers must be dispensed with and advances extended at a concessional rate.
Security and safety of bank deposits and reasonable interest must be ensured as majority of bank depositors are ordinary people and many of them retirees. All efforts should be made to strengthen Life Insurance Corporation of India. Disinvestment process initiated in the public sector General Insurance Companies should be stopped. Functional autonomy should be granted to LIC and the General Insurance Public Sector Association, the declaration said.