The white elephants
In a telling commentary on the condition of the State PSUs, the CAG in its recent report has noted that majority of the public sector undertakings in Punjab, Haryana, Uttar Pradesh, Andhra Pradesh, Telangana and Bihar have turned into white elephants, accumulating losses worth crores of rupees.
Our Cover Story is a reflection of the dismal condition of the State PSUs. Financial mismanagement has taken a toll on the working of the PSUs, with over thousands of crores of rupees being blocked as investment on the running of the loss-making units. Such is the sorry state of affairs that the number of loss-making Government companies is more than that of the profit-making ones.
Successive State Governments have kept alive dozens of dead PSUs at the cost of the exchequer. Is it not to expand their umbrella of patronage and pelf? One wonders.
The sordid saga of the State PSUs also brings out a very pertinent question. At a time when the State Governments are demanding more funds from the Centre, how will they justify investments in non-working PSUs to meet the maintenance expenses which resulted in a loss of crores of rupees?
Another question that arises is: Are the State Governments true to the covenant of nurturing their PSUs?
At a time when the Union Government is taking strong measures to bring reforms in Central public sector enterprises, should not the States also follow the same path? Nothing illustrates the sloth in the system more effectively than the lackadaisical manner in which the State Governments, irrespective of the parties in power, managed or rather mismanaged the affairs of the PSUs for years.
One can easily assume that the States have kept even the “dead” and “terminally sick” PSUs alive by pumping money into them at the cost of the exchequer for political expediency. Companies should generate revenue and have some commercial activity. And for commercial activity, something commercial needs to be done.
For years, the exchequer has been paying the price of the State Governments’ indecisiveness to take a bold stand and the PSUs’ lack of innovation to upgrade themselves with technology. It was high time the States stopped dithering on the issue and took a call on the fate of the PSUs. They should realize that the PSUs simply cannot run without innovation in a competitive market and should upgrade themselves to stay in the field as viable entities.