Minister of state for Finance, Anurag Thakur, said, “During the last two years, strategic disinvestment of 5 CPSEs (HPCL, REC, NPCC, HSCC and DCIL) has been successfully completed. Profitability is not a criterion for strategic disinvestment.”
He said that strategic disinvestment has been guided by the basic economic principle that the government should not be in the business to engage itself in sectors where competitive markets have come of age.
Really????????? There is no shred of truth in this!
Why does the Govt need to be in most of the sectors that it is in – Air India, BSNL, MTNL and to put it really drastically, why so many PSU banks at all? Why not just SBI? If govt is deciding to disinvest in loss making or profitless institutions or operationally unviable enterprises, why not bring loss making banks with heavy NPAs into this category instead of further funding these banks?
These thoughts come to mind when we read about how the distressed employees of BSNL has written to the PM, urging him to revive the company and make it a strong telecom operator. Really? Are they living under a rock? Reliance Jio has made it difficult for the extremely competitive and more efficient telecom companies to survive and BSNL wants to continue?
In a question hour at the Lok Sabha, Thakur said that the Govt has given ‘in-principle’ approval for strategic disinvestment of 23 central public sector enterprises (CPSEs) including subsidiaries, units and joint ventures. He named a few - Project & Development India Ltd., Hindustan Prefab Limited (HPL), Engineering Project (India) Ltd., Bridge and Roof Co. India Ltd, Pawan Hans Ltd., Air India and its five subsidiaries and one JV.
But its important for someone to tell the Govt that one PSU to another is not disinvestment and least they celebrate the reduction of NPAs – that did not really happen; they were mainly were write offs. So much money spent on bank recapitalisations, year-after-year when that money could be used for so better things, like good roads, improving Govt school quality, modernizing agriculture, building infra; so many things where money is needed badly.
oday the mere name of a PSU brings to mind the picture of dull, drab offices, with tired and demotivated employees, surrounded by piles of files. Somehow the picture of efficiency and quick work just does not fit into PSUs.
If we decide to decipher each and every PSU, every one of them will have issues. But most of them have almost the same common problems – the burden of too many employees, unproductive plants, old and rusted plants/machinery/assets, too much political interference, lack of transparency, poor governance. There is simply no will to grow into a world class organization, becoming leaders in technology and innovation. That is what we need to change. Now this is not a mere cosmetic change – we are talking about a change from inside to outside.
The moot point is that a major revamp or makeover of PSU’s is imperative. Govt should get out of sectors, which do protect national resources directly. Again Modi Govt can plan for reforms but will the huge labor force agree? BSNL is an apt example where even an IPO is not happening thanks to the opposition of the trade union. Most of these PSUs are like MNCs – huge reserves, immense cash balances, gold mine of land reserves and little debt with huge assets. So why can’t we unlock their potential? Why does a PSU necessarily have to be like a huge outdated equipment, which does not work but takes away all the resources?
Someone needs to get aggressive, to push one to the wall and get things done. Or else, many of these PSUs, which are actually potential world class companies, will die a painful death. Or aren’t they already dead?