Jawaharlal Nehru had propagated the concept of the public sector even before Independence, during the proceedings of the National Planning Committee set up by Subhas Chandra Bose in 1939. The public sector was intended to build up industries, especially heavy industries, in which the private sector was not prepared to invest private capital. The Bombay Plan of 1944 drafted by top industrialists and their representatives, including John Mathai, GD Birla, JRD Tata, Shri Ram, Purshotamdas Thakurdas, Kasturbhai Lalbhai, et al did, however, recommend that the public sector plants be handed over to private sector management. This process accelerated after Nehru's death in 1964, but reached its apogee in 1991 under the then Union finance minister Dr Manmohan Singh.

Dr Manmohan Singh, who had just the previous year, finished the South Commission Report, “Challenge to the South”, which extensively critiqued globalisation and supported national controls over foreign capital, did a volte face, removing controls of Indian and foreign capital including industrial licensing. The corporates were overjoyed including, of course, the media and politicians looking forward to a bonanza. Independent analysts asked why public sector industries, which were profit making or had that potential, were being sold off? Why was public capital sold for a song to the private sector? As a Congress leader said at the time, this was tantamount to "selling off the family jewels".

Did controls on industry diminish industrial development? The Monopoly Inquiries Commission, 1965, found that monopolies had actually prospered substantially in independent India. The Industrial Licensing Policy Inquiry Committee (ILPIC) 1969, which was the only committee to examine all industrial licences issued in the Second and Third Plan period, concluded that the "operation of the industrial licensing system" had favoured big business, especially the 73 large industrial groups, in particular, the Tatas and Birlas in that order. It also found that 52.5 per cent of industrial credit went to the large industrial groups at the cost of the small scale and medium sector. So the canard that the "licence, permit, quota raj" is a myth especially as far as the big and medium capitalists are involved.

Thus, the sell-off of the remaining public sector by the PM after his Bihar drubbing is a disaster and against national interest. The government of India's alacrity to sell off loss-making and non-strategic public sector companies is a confidence trick. The whole idea of the public sector was not only to provide relatively cheaper goods and services, but also to occupy strategic heights of the economy so that the national weal and not Indian and foreign capitalist interests were paramount. The Bhartiya Jana Sangh was opposed to it from the beginning. Thus Modi wants to sell off IDBI, a process already started. But why sell off a bank created to provide funds to industry? Why did the Congress sell off IDPL, which provided cheap drugs to the people, and so on.

In any case, the management boards of public sector undertakings (PSUs) were packed with bureaucrats and politicians, not experts in the field. So the PSUs were looted and made sick. There is nothing wrong with need based incentives to Indian and foreign capital. But why sell off profit making and potentially profit making PSUs to big capital? The PSUs are public assets, not private assets to be sold off in a country where 68.7 per cent of the people are below the poverty line. Yet centrist/rightist politicians, opportunist bureaucrats, business owned media, and foreign inclined intellectuals, are all party to selling off the public sector, made out of the sweat and labour of the working class. This is about as anti-nationalist as it gets.

And FDI welcomed in critical sectors? For example 49 per cent FDI in the defence sector. Has this been matched by the transfer of technology, so that a self-reliant defence industry is set up? The Soviets/Russians transferred defence technology to India for decades, for generations of MIG and Sukhoi fighter aircraft and other armaments. Why is that model and experience being given the go by? From Bofors onwards, it is well known that huge discounts are given by competing arms dealers and companies. But instead of "Make in India" as a nationalist slogan of developing manufacturing, it is becoming a matter of FDI bringing in its technology on generous terms, with Indian manufacturing not keeping pace. That has never been the way of becoming an industrial giant. "Make India" should be the slogan. But do the PM and his advisors care?