Why is the Modi government privatizing public sector banks?

Why is the Modi government privatizing public sector banks?

Finance Minister Nirmala Sitharaman has announced in the budget that two public sector banks and one general insurance company will be privatized this year.

Earlier, the work of selling IDBI Bank is going on and the announcement of selling stake in Life Insurance Corporation was done in the budget of last year itself. The government has not yet told which banks it is going to sell its entire stake or part of.

On Monday and Tuesday, there will be a strike in all the government banks of the country.

The strike is called by the United Forum of Bank Unions, the country's largest bank employees organization. The Forum consists of nine organizations of bank employees and officers of India.

The biggest reason for the strike is the government's announcement that apart from IDBI Bank, it is going to privatize two more public banks. Bank unions are opposing privatization. He says that when the government banks need to be strengthened and entrusted with the responsibility of accelerating the economy, then the government is on the opposite path.

Nationalization of banks
In 1969, Indira Gandhi's government nationalized 14 banks. It was alleged that these banks are not fulfilling their social responsibility to take forward all parts of the country and only remain puppets in the hands of their boss Seths. This decision is considered to be the beginning of bank nationalization.

However, earlier in 1955, the government had taken over the State Bank of India. And after this, in 1980, the Janata Party government of Morarji Desai nationalized six more banks. But after 52 years of bank nationalization, now the government is turning this cycle in the reverse direction.

In fact, since the 1991 economic reforms, it has been said repeatedly that the government's job is not to do business. Prime Minister Narendra Modi has recently reiterated this assertion.