What ails the PSUs in India?
Public sector undertakings are the nation builders of India. Over the past couple of decades, they have catapulted the country onto the world stage in sectors from energy and finance to agriculture and transportation. However, it seems that all is not well in many PSUs which are considered to be the lifeline of modern India.
In this edition we bring out the inside story of three of the largest PSUs.
Our Cover Story “unearths” a sordid saga of the ONGC, the largest integrated petroleum company in India. Bureaucracy Today has come across sensitive documents which put a question mark on the credibility of a multi-crore contract awarded by the ONGC to an Indian multinational conglomerate, Larsen and Toubro. Our investigation reveals that the L&T bagged a Rs 379-crore nomination contract, the cost of which is allegedly several times higher than the actual amount required to complete the project even after considering the price escalation factor. Also the fact that the L&T had “no proven expertise on record to lay claim for the specialized contract on its merits” is a grim reminder of the fact that how the PSUs have time and again compromised with the laid guidelines to favour private firms.
The incident, as one can easily assume, is just a tip of the iceberg. According to a Transparency International India report, the private sector is hand in glove with public officers and “instrumental” in effecting corruption. The report states that “collusive corruption”, where PSU officials join hands with those of the private sector, is “greatly present in the Indian business environment, particularly in the power, mining and oil sectors”.
It was high time the Narendra Modi Government which has taken the cudgels to bring transparency in the functioning of PSUs took cognizance of such incidents. There should be a mechanism in place under which all business deals made between a PSU and a private firm should be scrutinized. This move on the part of the Government will bring the State-run undertakings from the labyrinth of severe compromise of efficiency, neglect and cost overruns.
In this edition, we also unravel the story of how the Government removed Ravindra Kumar Srivastava from the Chairmanship of the Airports Authority of India almost four years before his tenure was to end after he allegedly began “arm-twisting” industrialist Vivek Nair, Chairman of Leela Palaces, Hotels and Resorts, as well as the AAI’s joint venture partners -- GMR and GVK.
Also we have highlighted the issue of the GAIL India postponing for the third time in a row a multi-billion dollar tender for hiring nine ships to transport liquefied natural gas from the US, an action which is seen as an inordinate delay in implementing the Make in India initiative by the State-run gas major.
Whatever may be the reason for the dismal state of affairs in the Indian PSUs, ultimately it is the nation which is the loser. The Modi Government has a plethora of challenges ahead and only time can tell whether it would be able to stem the rot plaguing the backbone of the Indian economy.