The Failure and Unfailure of Public sector

Nehru was a great thinker and philosopher. He was a socialist, but was much influenced by western thought. Though there were Indian influences as well, the problem has been that there have never been any indegenious theories. All have been imported from the west. Applying them to local conditions brings about inherent contradictions. They are bound to fail.

All these various theories have been the result of a revolt against inequalities prevalent in the society... But removing inequalities is in itself a very tricky business... Equality is an end and never a means, if it becomes a means then it increases inequalities... In the era of welfare state it is the duty of public sector to promote equality... because the private sector cannot do it, its only aim is to earn profit. The private sector may be economically sound and flourishing, because it earns profit. But public sector is not failing because it is not economically sound. To judge public sector solely on economic criteria would be sheer narrow-mindedness...
The aim of public sector in India was never solely economic development but also social development... And it stays so even today. The argument that public sector has become loss making is a fallacious one. Its aim was never profit making so it was a loss making business from the word go... The public sector was established in public interest with a different motive... For example let us consider the case of the department of telecommunications. It was established not with the aim to earn profit, but to connect each and every nook and corner of India through telephone lines. And it did.
Private sector would never have invested in remote inaccessible tarrain where there was little chance of profit. Public sector could do it because it was not driven by profit motive...

Here, in India lies the biggest contradiction relating to public sector... The aims and objectives of the public enterprise was fixed on the criteria of social and public interest and it was judged on the criteria of economy and efficiency. It was bound to fail... This contradiction created a clash of interest within the public sector... It was unable to comprehend as to what was required of it, public interest or profit... In this confusion nothing was achieved... they were never supposed to earn profit and they never did... And they were never held accountable for public or social interest, so the main objective failed as well. Public sector had failed... Or has it...

Now starts the talk of disinvestment... If the public sector has failed then it must be disinvested... Infact I believe that even if it has achieved its utility then also it should be disinvested... By achieving its utility it has achieved its objective and now public interest must give way to profit and so this can be opened to private sector. But wherever the public sector has not achieved its utility, whether it is loss making or profit making it must not be disinvested. This is because the private sector shall never work in the public interest, it shall work only for profit... And the social or public goal for which the public sector was established would perpetually remain unachieved. In this case the remedy is not disinvestment but reorientation... The contradiction between goal and accountability must be removed... The public sector must be held responsible for its public responsibilities and not profit. The public sector has not failed instead we have not been able to gauge its utility... And this ignorance on our part has resulted in it being steered the wrong way...

Disinvestment should be done and must be done only where public sector has grown, where there was no public responsibility, or where it has achieved its utility. In cases where it has been a mere economic failure, it must be reorinted towards its public goal and not in any case disinvested.