Reviving the public sector
When India began the process of liberalizing its economy in the early nineties, many economic pundits raised doubts about the competence of public sector enterprises to face challenges from local and global private entities. Twenty years down the line, the PSUs have shown their mettle and proved the fears and apprehensions of the critics unfounded.
The PSUs have played a vital role in establishing the foundation of a self-generating industrial economy in India since the First Five-Year Plan rolled out five Central public sector enterprises with a total investment of Rs 29 crore. However, there is no denying the fact that some PSUs have become white elephants and some are facing in-house challenges while there are others which have been facing stiff competition from private firms.
Of late, the Narendra Modi Government has initiated various measures to revamp the public sector undertakings which are now facing the challenge of increased domestic and global competition. The recent shifting of Disinvestment Secretary Aradhana Johri for “non-performance” is a clear signal of the shift in the Centre’s policy and indicates that the Government is in no mood to make crucial departments a comfortable parking slot for bureaucrats.
The Modi Government’s move to shut down the loss-making HMT is another bold step taken to revive the public sector. There are speculations that other non-performers like Hindustan Shipyard, Hindustan Cables, Scooters India, MTNL and ITI are likely to meet the same fate in the near future. An enormous amount of taxpayers’ money was spent by the earlier UPA regime on reviving the ailing PSUs but in vain. The UPA Government even kept the terminally sick PSUs alive by pumping money into them at the cost of the State exchequer for political expediency.
No doubt shutting down the ailing PSUs would render lakhs of employees jobless but what if the employees had been in the private sector in a similar situation. Would they continue to have a secure job with other benefits in spite of their non-performance? It is a point to ponder.
It is true that the Government should support an ailing State-run undertaking but a line has to be drawn as to what extent it should keep spending taxpayers’ money on propping up sick and dying PSUs. Companies are not established only to give salaries to their employees. They should generate revenue and have some commercial activity. For years, the State exchequer has been paying the price of the Government’s indecisiveness to take a bold stand. But now things are changing but much needs to be done.
Our Cover Story written by Khurshid A Ganai, Chairman of the Bureau of Public Enterprises, J&K, on special request discusses the steps further required to be taken by the Central and State Governments to improve the performance of the PSUs.
Innovation is the name of the game. The PSUs cannot afford to remain satisfied with the status quo in a world where technology is changing at an unimaginable fast pace. There should be a continuing and sustained effort on the part of the PSUs to improve their performance and productivity by paying increasing attention to research and development and to operate on the frontiers of modern scientific and technological knowledge.