Dr Thomas Isaac. | Screengrab
Thiruvananthapuram: The monetisation programme of the Union Government is a backdoor sales of the national properties, former finance minister and CPM leader T M Thomas Isaac opined. He was delivering his biweekly class ‘Money Matters’ through the CPM Kerala YouTube channel.
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman launched the asset monetisation pipeline, the National Monetisation Pipeline, based on the mandate for 'Asset Monetisation' under Union Budget 2021-22. NMP estimates a potential of collecting Rs 6.0 lakh crores from 2022 -2025.
If a railway station is given to a private player to monetise, he may build a hotel above it to make maximum use of it. The government may be leasing it out for 30 years. But how will the government take it back without paying for the investments made by the private agency? We don’t know if the government will have money with them at that time. So the government may decide to sell the railway station or extend the lease. In effect, the property will be gone forever, Isaac alleged.
He cited the example of the Cochabamba Water War of Bolivia in 1999-2000 and said people will have to pay high user fees if monetisation becomes a reality. The Cochabamba river was privatised as mandated by the World Bank to avail loan. The government water supply department had to pay to the new owner for taking water from the river. They levied the amount from the citizens which led to huge protests.
If the buyers want to pay lakhs of crores to the government, they will have to loan it from the banks. Instead, why can’t the government take loans directly from the bank? The neoliberal agenda of the union government that pleases the international finances is the blockade in this, Isaac said. If the government take loans from banks, it will show a revenue deficit which will affect foreign investments, he said.
What is the alternative? Collect more tax from the rich. Western countries collect 30 per cent of their income from taxes while India collects just 15 per cent. This has to change, he said. Models like KIIFB are develpoed using the laws made for the corporates. "So there are alternatives,' he added.