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will think highly of what is called ‘ treason against the Government ’. Let us now Conclude — ( 1 ) The main purpose of the public sector investment is to encourage and help the growth of the private sector . For example , production of steel in the public sector has helped the upsurge in the engineering industry , dominated by foreign private capital ; machine tool production has helped the private sector to grow . ( 2 ) The public sector has helped to mobilize scarce financial resource to be used by foreign monopolies for their growth through what are known as joint sector ventures such as the oil refineries in Cochin , Madras , and Haldia , and in the fertilizer industry as in the units at Madras and Kanpur . ( 3 ) Production in the State sector , siphoned off into private channels for marketing has helped private capital to reap super-profits such as in drugs manufactured in Indian Drugs & Pharmaceuticals Ltd . ( 4 ) The main purpose of government policies in the field of banking has been to promote private enterprise through the nationalized banks . The system of financial institutions ( IDBI , ICICI , UTI , and so on ), instituted after 1948 , is mainly to provide capital for investment in the private sector . ( 5 ) As Gunnar Myrdal says in his “ Asian Drama ”, “ In weighing the reasons for and against public participation in the industrialization of India , it should be stressed that the interest of private business does not normally conflict with expansion of the public sector in big industry . Government investment is meant to be concentrated in heavy industries where little private initiative is forthcoming . To the extent that , these investments create external economies or provide goods , which would otherwise be scarce owing to the strained foreign exchange situation , there should be on the contrary a harmony of interests . Much construction will also be done by private contractors and the purchase of various supplies will increase
August - 2022 demand in private industry . More important , investment and pricing policies pursued by public enterprises are usually such that , by holding down prices , they swell the profits of the private sector . Thus , when put into practice , the vaguely socialist notice that public enterprises must render services at a low price , in fact , boosts considerably , the returns on private capital . Instead of being used to supplement government revenue and help to mop up purchasing power , the public sector functions to inflate private profit ”. ( Page - 819 ) ( 6 ) The management of public sector units , as of the Madras and Cochin oil refineries or Madras Fertilisers , has been handed over to private management - a demand the World Bank has been making on India consistently for several years . Thus the public sector , which ought to have played the role of curbing the profit greed of Indian and foreign financial sharks , is to the contrary becoming a happy hunting ground for superprofits for the foreign monopolies which have been entered the management of the public sector concerns . They have got control over quite a few industrial and financial corporations - through empty participation and loan capital . Penetration of huge foreign monopoly capital is growing uninterruptedly , not only in the private sector but also in the public sector . Thus the public sector in India has practically no antiimperialist or anti-monopoly progressive character , it has become a weapon in the hands of foreign monopoly and Indian big business - a combination of foreign monopoly capital and bureaucratic capital in the main .
In India , the State power is ultimately in the hands of the comprador bourgeoisie in alliance with the landlords . This class , by its very nature , cannot follow independent capitalist development . This class cannot afford to alienate itself from the landed vested interests and foreign finance .
In such circumstances , the public sector , instead of being helpful for the growth of independent industrial development , has become mainly an instrument in the hands of domestic and foreign monopoly capital . (‘ INDIA MORTGAGED ’, Page - 333 to 356 )
After going through such a detailed description and analysis of India ’ s socio-economic and political activities during the period from 1947 to 1971 , as given in Com . T . Nagi Reddy ’ s marvelous book ‘ INDIA MORTGAGED ’, there cannot remain any doubt in the minds of anyone that the Government of India , which is none other than the representing authority of the big bourgeoisie and big landlord classes of our country , has constructed the basic economic structure of India in such a way that , the country , to maintain its financial balance , will always be bound to keep on increasing its foreign loan year after year , and the phenomenal speed with which it is growing , India is going to get enmeshed more and more tightly into the stiff net of imperialist finance capital . This objective reality is quite clearly evident from the fact that , according to RBI ’ s bulletin , India ’ s overall budgetary deficit covered by external assistance rose from 9.2 % in the First Plan to 30 % in the Second Plan to 49.2 % in the Third Plan , and which further shot up to 52.7 % in 1955-56 . Due to this financial compulsion of the Indian Government towards dependence on loan capital to cover up its budgetary deficit , the amount of foreign loan received during the First Plan @ Rs . 201.7 crores , rose to a gigantic figure of Rs . 39.88 lakh crores by the end of March 2019 . All these compulsions of our over-dependence on imperialist finance capital is nothing but a fall out of the imbalance of financial mechanism created by our big bourgeoisie big landlord Government within a very short period of receiving the state power from the British Government , intending to create such a social-economic system , so that , continuous and prolonged exploitation of the toiling masses of our country can be made effective forever , and
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