Positive factor that improved the condition of PSUs is the transparency and commitment of NDA Government to grant autonomy & freedom of operation to their managements.
Public Sector Undertakings (PSUs) have always played a significant role in national income and in overall socio-economic development of Bharat. Since the Independence, there has been a progressive expansion in the scope of the Public Sector. When Bharat became a Republic, there were only 5 PSUs but at present, there are around 250 central public sector undertakings (CPSUs). As per the report by Dun & Bradstreet, leading provider of International and Bharateeya Business information, published in July 2015 that in financial year 2014, the CPSEs contributed around 18.0 per cent to the country’s GDP in terms of turnover and 21.7 per cent of total revenue to the Central Exchequer and employed around 1.35 million people.
PSUs have underperformed in the last years due to policy paralysis of successive governments. But now the scenario has changed. The flow of investment into PSUs has also increased. It has experienced a phenomenal growth both in terms of number and volume of investment. PSUs are now in a revolutionary phase under the NDA Government, gaining efficiency and competitiveness and making great strides in the business domain. The government led by Narendra Modi has given a big push to PSUs. When he was Chief Minister of Gujarat, Narendra Modi had played a great magic to revive the white elephant PSUs who incurred big loss to the state exchequer. So far, it has been evident that he has successfully implemented his Gujarat experience at the national level also.
For decades, public sector enterprises like Air India, National Textiles Corporation, BSNL, Hindustan Antibiotics, MTNL, Heavy Engineering Corporation, Scooters India, Eastern Coal Fields, Bharat Coking Coal, News Print Corporation and Hindustan Shipyard had been blamed for accumulating heavy losses. One of the major decisions of this government was a revival plan worth over Rs 40,000 crore for 46 sick PSUs. Now it is expected that Air India is likely to make 6 per cent profit this fiscal. Its net losses have declined by more than 22 per cent in the past four years, reflecting improvement in its financial and operational performance.
Another example is of BSNL. Now BSNL reaches to profit of Rs 672 crore profit in 2015 from loss of 7884 crore loss in 2013. While most of the private telecom companies suffered technical problems during Chennai floods, BSNL was the only service provider worked as the helping hands for the people. BSNL provided free local and STD calls as well as 100 MB data to their customers for seven days.
Under the Modi regime, public sector companies working in various fields such as energy, infrastructure, power, metals and mining have gathered a new momentum. The present government has taken several policy measures which attracted investment endeavours in public sector. The government has significantly improved the performance of the coal, power, and mines and minerals sectors by the enactment of Coal Mines (Special Provisions) Act, 2015 and Mines and Minerals (Development & Regulation) Act, 2015 which ensure the allocation of coal and other minerals blocks through more transparent auctions and necessary approvals from concerned authorities before allotting the mines.
Experts say that a major positive factor that improved value of all PSUs is the commitment of this government to grant autonomy and freedom of operation to their managements and transparency. The act of Modi Government to let them take decisions without any interference from the ministries also helped in improving efficiency and profitability in turn, leading to better perception among investors. –Nishant Kr Azad
