Why divestment of the Central PSUs would be axing ourselves in the foot as a nation
Since the liberalization of the economy, the Centre has been all for diluting its stake in Public Sector Undertakings (PSUs). From outright sell-off to divestment, everything has been proposed regarding these enterprises with no political party, except those of the Left, ever objecting. Again, while the Left objected to it at the national level, it was at the same time heavily enough influenced by neo-liberalism to start implementing the same policies in States like West Bengal.
Two PSUs – NHPC and Oil India – have already gone public. Coal India, NTPC, Satluj Jal Vidyut Nigam, REC and many others are in the queue.
The PSUs were weakened over the years through interference of politicians and bureaucrats for personal gain, nepotism and corruption. Then, the same set of people started supporting the clamour for closing down or selling off the PSUs to stem the drain of national resources on them. Even the profit-making ones failed to escape the clutches of the new belief that the state should withdraw from running industries. This fake ideological garb—neo-liberalism—exported by the wealthy West, found takers among India’s intellectuals. When the crunch came, the US and other Western countries jettisoned this belief and pumped humongous amounts of money to save their giant multinational companies. They acted in their national interest.
But, in India, by then much was lost. The SCs and STs lost a large chunk of their scope for employment. New avenues of corruption wreaked havoc with the environment and the populace. Protest grew in various forms. Finally, some concern for national interest returned. The government was forced to clog the scope for loot in the form of selling national assets cheaply. But the obsession with the share market remains a threat for the PSUs.
Now, after 20 years, the frenzy seems to be over. The Standing Conference of Public Enterprises (SCOPE), an apex body, has advised the government against a flood of public sector listings, reportedly saying: “There should be no flooding of offers of public sector companies in stock markets or else it would eat into their valuations.”
Despite all the hammering, the PSUs are still going strong. The combined profit of profit-making Central PSUs stood at Rs 1,08,435 crore during 2009-10, while the loss incurred by the weak ones was only Rs 15,842 crore. The net profit of all 217 Central PSUs during the year was Rs 92,593 crore compared to Rs 83,876 crore during 2008-9 – an increase of 10.40%. The net worth of all Central PSUs went up 12.42 % from Rs 5,87,286 crore in 2008-9 to Rs 66,0245 crore in 2009-10. Their contribution to the Central exchequer by way of taxes, duties, interest and dividend amounted to Rs 1,39,830 crore in 2009-10. They earned foreign exchange worth Rs 77,745 crore in 2009-10, while their foreign exchange outgo was Rs 42,0447 crore.
Last, but not least, the Central PSUs employed 14.91 lakh people, excluding casual workers, in 2009-10.
Should we destroy these enterprises, built with our money, to open up ways of loot for some people? Or should we, as the Common Man, protect our assets and force our representatives to do so? Should we force the government to stop milking these PSUs and instead turn them into professionally-run enterprises or should we remain indifferent?
