After the recent U.S. SEC and DOJ investigations into corruption allegations involving a certain oligarch’s company, there has been much talk about how it will affect investments in renewable energy.
These arguments hinge on one thing: that only the private sector can build infrastructure. Nothing could be further from the truth. All the major infrastructure built in India after independence, until the neoliberal reforms, was done entirely by the Indian government with minimal private involvement. Indian Oil Corporation still remains a public sector corporation nominally, despite behaving like a private company due to pressure from neoliberals.
The reality is that the Indian government, as the sovereign issuer of the Rupee, can always finance renewable energy investments. It is not about whether the magic numbers are there in bank accounts but whether sufficient labor, resources, and foreign exchange are available. India can expand the role of the Solar Energy Corporation of India, making it a public monopoly investor in renewable energy. It could manufacture solar panels and sell them to another public sector enterprise tasked with building solar farms.
Similar public sector corporations can be created for wind, nuclear, and energy storage as well. Nuclear energy in India is, thankfully, under the control of the Indian government. However, due to a neoliberal mindset, investments have not been sufficient to increase its share in the country’s energy mix.
What about finance, then?
The mainstream narrative on the Green Transition is strongly rooted in the neoliberal economic mindset, one where the government is constrained by a fixed pool of financial resources it must ‘borrow’ from. In this view, governments have to increase taxes or rely on foreign investments to fund a Green Transition.
This is clearly not the reality. One could ask: where does the private sector get its money from? Banknotes are issued by the Reserve Bank of India. The Indian central government is the monopoly issuer of central bank money. Commercial banks, whether public or private, are the monopoly issuers of bank money. Trace any money back to its source, and it will ultimately come from either commercial banks or the central bank.
This does not mean, however, that commercial banks are ‘free’ in the same way governments are. It means that the government allows commercial banks to create money convertible to its own money. Commercial banks hold accounts at the central bank to settle payments between banks, as well as payments between the government and the private sector (e.g., tax payments, subsidies).
Thus, it is clear that the government can do all the things the private sector can, just as effectively. Oligarchs should be seen for what they are: parasites, not industrialists.
That’s all.