Privatising the Government, Defense and Taxing the Citizens


Two days back, India launched the South Asian Satellite that will facilitate communication between the South Asian countries save Pakistan. The feat was achieved ISRO which is a public sector body, run and funded by the Government. ISRO has been also on the forefront to serve the private parties by launching their micro-satellites. It boasts of the prestigious clientele of global brands. And now, the Government has announced privatisation of defense. Defense is a public good, no private body can take over the defense sector as the overall losses in terms of salaries of the army personnel and other expenses simply does not make defense a commercially viable option. Unlike some countries where there are private militias, India has a national army. India procures weapons from other countries and it is one of the leading buyers of the weapons in the world.

India should arm with an aim, not without aiming. India’s defense needs must be acutely studied and the hostile elements should be accessed. With the wars becoming very least possibilities unless driven by some deep political motives, it is important to develop competency in the strategic sectors and diplomacy. The weaponization of the country must be carefully planned and the Government has a leading role to play in this area. However, RSS/BJP has been impatient about this issues. They would like to quickly hand over manufacturing of the key defense equipment to the private sector. By nature and design, the goal of the private sector is to make profits, while the goal of the Government is to serve the public.

The private companies will always keep profit above the nation and people. It has been proved throughout the history of the world that economy controls the larger game. Defense expenditure is huge and the government procurement in this area runs into billions of dollars. Defense is a lucrative area. But what keep the defense sector on is the war or perceived the threat of war. Therefore the Arms and Ammunition companies have been always in the front to fuel to wars. It is a well known fact as to who gains by the wars and conflicts: the Arms establishments!!

Should we privatise the defense production area?

This question is so vital that the PMO and the Finance ministry cannot alone decide on it. It has to be thoroughly discussed and debated in the Parliament if India needs to take this course of action. There are a few models of developments in which the Governments play a role of partner in defense production. The Government is discussing strategic partnership (SP) with the six private players, and if you are keeping tab on the India’s establishment and Modi’s cronies, you will not have a problem in identifying two key players.

You guessed it right; they are Adani and Ambani: the twin pillars of Modi’s financial powers. We can state many arguments against the involvement of the private sector in the defense production, but the main pretext given is the failure of the public sector.

The theories in the economy have taught that there are areas where the market fails and therefore the Government must intervene and there are areas where the Government fails and the market must be let loose. That is why the Government’s role in the business is not that of the sidelined player, but an important player as a regulator and in many cases the producer of the certain goods. Defense goods and infrastructure projects are some of the areas where the profit is not gained for a long time.

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The Government must come with an overall policy as to how the Government will be the major player and must produce important key arms directly instead of relying on the private sector. Reliance is manufacturing Guns for army. Why reliance? And why guns? There must be a list of items which must be created and strategic items must be privy of the Government, but looking at the four areas where the Government is allowing the private sector like submarine and aeroplanes, it is clear that the Government is acting in a manner that will create a very skewed development in the area of defense. India is a big country and it has the capacity to lead the world in the right direction by fully absorbing the values of the Indian constitution.

Ultimately, it will be taxpayers money that will go into buying these arms and ammunition. What we instead try to do is raise the level of R and D with our competent manpower. China recently manufactured its own commercial jet C919 which is scheduled for its first flight on 10th May 2017. Can we not develop our capacities in manufacturing everything from jets and submarine with a substantial participation of the public money? We can if we have a will to help the public at large, and not just a few established businesses which can never be bigger than the public and their collective power.

Author – Mangesh Dahiwale, Human Rights Activist

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