‘Day-light robbery’, Siddaramaiah slams disinvestment of banks

Bengaluru: Karnataka Opposition leader Siddaramaiah on Thursday wrote to Prime Minister Narendra Modi, strongly objecting to the proposal to sell public sector banks as part of disinvestment programme.

“The hurry to disinvest banks is worrying and is backed by an unfounded economic approach. Through disinvestment of banks, the BJP government is executing day-light robbery of common man,” he said.

“The recent announcement by Finance Minister Nirmala Sitharaman to sell public sector banks as part of disinvestment programme, has sent ripples across the nation, raising eyebrows among economists, political leaders and also common man. The decision lacks exhaustive research, consensus among banking professionals, experts and bank employees, and the analysis of the outcome. The decision stems more from the failure of the government to increase revenue for the last 8 years, rather than the structural need to disinvest,” he said.

He further explained that, public sector banks in India have a rich, inspiring and progressive history – contributing to the development of every individual and enterprise. Banks are an important link between people and the economy. It gave economic independence to the common man. This was possible only because of nationalisation of banks in 1969 by Prime Minister Indira Gandhi, he added.

This access to credit enabled the growth of businesses, helped overcome short-term tides, took banks to the doorstep of farmers and improved the financial strength of the country. Banking system improved savings, ensured low interest capital and easy accessibility to credit. The number of Public Sector Bank branches grew to more than 65,000 by 1992 – ensuring the reach to all corners of the country. The RBI had once said nationalisation is the most important economic decision by any government since Independence and not even the 1991 reforms are comparable to social, political and economic consequences, he noted.

Disinvestment is definitely not the same as privatisation. In privatisation, the government is allowing private players for additional investment and more competition for better outcomes, but with the disinvestment, it is just selling public owned assets to corporations paving the way for widened socio-economic and political inequalities.

“I, being totally opposed to disinvestment of public sector banks, will avoid discussion of fallacies in technicalities and valuation of disinvestment process which is a bigger issue in itself. In the interest of every Indian, I urge you to withdraw the decision to disinvest banks to ensure equality, to promote economic participation of every individual and in nation building,” Siddaramaiah said.

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