All India Bank Officers' Confederation (AIBOC) has expressed its opposition to and strong anguish over the decision of wholesale demolition of Public Sector Enterprises as elaborated by the Finance Minister Nirmala Sitharaman while unveiling Prime Minister's "Atma Nirbhar Bharat" package over the past five days.
AIBOC is the apex body of the bank officers' trade union movement in the country having a membership of over 3.20 lakh officers of the industry.
The announcements have come as a major disappointment to the country's citizenry, the bank Union said. The economic package contains very little in terms of a fiscal stimulus and apparently tries to exaggeratedly inflate the package size by adding liquidity infusion measures with that of fiscal measures, which is not only misleading but also technically fallacious, AIBOC said.
Most disturbingly, Finance Minister has announced in unambiguous terms its intention to privatise Public Sector Enterprises and assets across sectors, which far from promoting economic self-reliance will destroy the very foundation of our national economy, it said.
In view of the severe post-coronavirus pandemic crisis which has hit economies across the globe, AIBOC had demanded a substantial fiscal package to be financed through an expansion of the fiscal deficit.
The government has the option of issuing special COVID-19 bonds and borrow money directly from the Reserve Bank of India at a low-interest rate, which has also been the advise of several eminent economists.
It is disquieting that this reasonable course has not even been considered by the Government despite the severity of the crisis, Union said.
The Finance Minister has rather relied on further liquidity infusion and chided the public sector banks for parking the funds back with the RBI, which arises out of her apparent lack of understanding of the ground realities, AIBOC said in a statement.
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, the Union said.
As evident from the pictures emerging across the country, poor people, especially the migrant workers, are facing acute shortage of cash and huge decline in purchasing power. Making a direct cash transfer of at least Rs 7500 per household alongside food entitlements would have gone some way in providing 'meaningful relief' to this worst affected disadvantaged and needy section of the society, it said.
The government has refused to increase the paltry cash transfers of Rs 1,000 to Rs 2,000 to restricted beneficiaries, which were announced in the initial PM Garib Kalyan Yojana package, the Union said.
"We fail to comprehend how purchasing power can be generated in the economy if the workers are not compensated for their income loss during the lockdown. It is most worrisome that several State Governments are suspending labour laws to increase working hours and intensify labour exploitation, rather than providing just and timely support to the distressed working class," the statement from AIBOC said.
Given that the banking sector is likely to feature as one of the strategic sectors, AIBOC is alarmed at the Finance Minister's announcement: "To minimise wasteful administrative costs, a number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised / merged / brought under holding companies". This indicates the intent of the government to further pursue merger and privatisation of the public sector banks and launch an all-out attack against the bank employees and officers, the Union said. AIBOC will go to any extent to thwart implementation of such anti-people policy of the government, it further said.