Stalin’s papa

Disinvestment is dead. Nationalisation on the cards

(Tamil Nadu) Chief Minister M. Karunanidhi said on Thursday that his government was firm on the announcement made on Wednesday on nationalisation of some industries.

In an attempt to make available cement at an affordable rate, the State Government on Wednesday decided that cement will be sold through the Civil Supplies Corporation’s warehouses at cost price.

At a function to mark handing over 1,094 buses to transport corporations here, the Chief Minister refrained from naming the industry the government intended to take over, but referred to it as “some industries that the government announced yesterday [for nationalisation].”

Mr. Karunanidhi recalled that when the DMK government decided to nationalise private transport corporations and approached them, owners of the corporations had cooperated.

They even attended the function held to mark the transport nationalisation project.

“Like that in the future, the government has announced that it will nationalise some industries. When an event of that nature is happening, I believe that the industrialists will come and felicitate us,” he said. [The Hindu]

Now what kind of industrialist will felicitate the government for taking over his business? Ans: (a) the kind that is glad to get rid of a troubled, loss-making venture and (b) the kind that is forced to grin and bear it.

But really, it’s not just a question about whether industrialists line up to garland Karunanidhi. It’s a question of whether ordinary people will be any better off. It is only a scriptwriter’s fantasy to believe that selling cement at cost in government shops will make it available, and at affordable rates.

Only when all the non-grinning industrialists, non-lossmaking industrialists had fled the state did another chief minister realise:

“We have to accept capitalism; where is State capital? This is being realistic in a situation where there is no alternative,” (West Bengal chief minister) Buddhadeb Bhattacharya said while addressing an audience on the occasion of the 42nd foundation day of Ganashakti, the Bengali daily and mouthpiece of the Communist Party of India (Marxist). [The Hindu]

But Tamil movies are not know to take ideas from Bengali ones.

8 thoughts on “Stalin’s papa”

  1. Do not worry, Tamils will pay a fitting tribute to this dying star by removing him from his post in the next election.

  2. This man is gone insane. There is no way in bleeding hell DMK will win after him. He wants to win another election and anoint his son as leader. Which is why such gimmicks. It sure is entertaining to see an otherwise cocky old man get insecure. One must salute amma atleast for this!

  3. The TN govt. announced a couple of days ago that it planned to “nationalise” the cement industry since consumers had to pay exhorbitant prices. A close friend of the Maran family (rumoured to be part owners themselves) owns the largest cement company in the South, India Cements. The company has been around for about 75 years, went through a rough patch early this century and is now back in the black. The company, ironically, bought out one of the TN government’s plants about a decade ago.

    When times were good and the family was still one, the company was family, so to speak. But obviously with the extended family not being family any longer, the wagons need to be circled and Mu Ka’s current roll of the dice is just a step in what promises to be a long drawn out battle. Stay tuned!

  4. Nationalization vs Disinvestment scenario in TN is pretty interesting. But one needs to remember that TN government taking over industries is not new and guess what, such takeovers have been very successful and beneficial to the people!

    TN bus transport companies are easily the best I have seen. Compared to the lal dabbas in nearby states, TN bus corporations are better run and relatively cheap. This nationalization of transport companies by Karunanidhi from the likes of TVS motors etc and further modernization unleashed by MGR has indeed been a success. (Note: small private operators do exist in TN.)

    Further, TN has recently nationalized Liquor shops. (Well, its actually IMFL and not country liquor bcos TN has partial prohibition.) Even this nationalization has been successful. There is more sense to the location of TASMAC (state run company) shops than with private ownerships. Liquor licenses are pretty dangerous and corrupt endeavors. So this nationalization has clearly benefited TN.

    TN has also nationalized the selling of river sand. The private monsters who were doing illegal sand quarrying and ruining rivers were done away with.

    TN has recently got involved with Cable TV distribution. Although the Karunanidhi’s agenda was to stymie the Sun Group, government attacking private monopolies can only benefit the TN economy. Infact Jayalalitha wanted to nationalize Cable TV distribution altogether. Again, TN has benefited from this pro-active involvement of state in business. Chennai ofcourse was the first state to embrace CAS.

    TN again has resolved to create Land pool of several thousand hectares across the state to prevent fiascos like Nandigram, Tuthukudi Tata project, Chennai satellite cities project etc. In the debate on who should acquire land from farmers (govt or private companies or SEZs), this is an interesting idea. Considering that SEZs are an illogical expansion of the MIDC and TIDCO models pioneered by MH and TN resp, other states may do well to learn from this TN initiative.

    The latest nationalization talks on Cement are not misplaced either. As someone already pointed out ‘India Cements’ company is rumored to be owned by the Maran family. Besides Indian cement industry is indeed being cartelized bcos of consolidation (Grazim, Holcem). In such a scenario TN government interfering in this industry may not be a bad idea in itself. TN economy cannot afford higher cement prices.

  5. Balaji – I won’t comment on the history of nationalization in TN but will point out the problem in the last para.

    The solution to high prices is not to nationalize and ration products. It is to unlock the supply side. If cement is expensive and cement makers are making a lot of money, give licenses to manufacturers and investors to start more cement factories. Prices will come down when the supply is high and there wouldn’t be a big government office inefficiently dealing with market economics.

  6. Manu

    t is to unlock the supply side. If cement is expensive and cement makers are making a lot of money, give licenses to manufacturers and investors to start more cement factories.

    Surely you mean “don’t stop those who want to make cement from making it”. I’m not sure if licenses still exist as such, but I’m sure there are encumbrances.

  7. Cement prices are high because it is a product with very low demand elasticity, and because currently capacity utilization is running at close to 100%. One major reason for prices having stayed high for a number of years is that thanks to the environmentalists, capacity addition is taking much longer – most projects are running 6-12 months late.

    Just 3 years ago, prices had tanked due to oversupply and India Cements was on the verge of bankruptcy…. with planned capacity additions in 2009, we may see a similar scene again.

    BTW, Long term prices in Tamil Nadu will keep rising – it does not have limestone, (beyond existing plants) and hence cement will need to come in from further away. Its a shame that the industry buckled down to pressure from an anti-national idiot like Karunanidhi and has agreed to hand over discounted cement for his poor party cohorts to sell in the black market

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