Modi on ‘right track’ offloading PSU shares, says a new book

New Delhi: Amid raging debate over the manner economy has been handled or mishandled by the Narendra Modi government during Covid9 and otherwise, a new book by a longtime financial watcher says the Prime Minister is “certainly on the right track” vis-a-vis his policy towards public enterprises.

“Modi is certainly on the right track as there is need to unlock value of public enterprises which is over Rs 10 lakh crore. This will also ensure that enterprises are run efficiently to leapfrog in economic development,” says the book ‘The Public Sector – The Good, The Bad, The Ugly’ penned by K R Sudhaman.

But the author also says – “Public Sector is a much maligned word these days as the flavor now is privatization. It is unfortunate that we forget the yeomen service it (public sector) has done to the economic development of India. …..The objective of public sector is totally different. Public sector enters area where private sector does not want to tread”.

In the wake of crisis triggered by Covid19 infused developments, the government has come out with new disinvestment or privatisation policy. Among a number of moves, the Prime Minister’s Office (PMO), the Finance Ministry and the Niti Aayog have already discussed the inclusion of insurance sector for strategic disinvestment.

Of course, the losses suffered in Public Sector Enterprises have increased manifold.
The number of loss-making CPSUs have increased over the three years. In 2015-16, 2016-17 and 2017-18, there were 48, 54 and 56 sick CPSEs, says the Public Enterprises Survey.

This list of loss-making companies does not include 21 public sector banks and notably, the total losses of public sector banks in 2017-2018 stood at Rs 85,371 crores.

Mr Sudhaman served with country’s premier newsagency, the Press Trust of India (PTI) and was its Economic Editor and Regional Manager (West) in Mumbai.

It goes without saying the public sector cannot forget the “yeomen service” public enterprises had done to nation building and economic development at critical times and even today many of them have been performing exceedingly well. Public enterprises always came to the rescue of the government in times of crises and acted as a stablising factor to steady the economy.

Commenting on the Modi government’s policy towards public sector, Sudhaman says: “Prime Minister Narendra Modi has now decided to take the bull by the horn and privatise many or most of the public enterprises, which had outlived its utility”.

Backing the entire idea, the book notes – “There is no merit in the argument that offloading public enterprises is like selling family silver to pay the grocers’ bill. Family silver is meant to bail out during rainy days”.

Unlike private sectors which essentially bank on profit making, the author has done commendable job to analyse certain minute facets of economy and nation building which often get lost in today’s debate of growth figures.

Public sectors have helped job creation and regional development for decades otherwise how could industrialisation reach far-flung difficult terrains like the northeast of India.

Experts have acknowledged that the Public sector has always bailed out the economy in difficult times, be it 1962, 1965 or 1971 wars or during economic liberalisation or as late as the 2008 global financial crisis.

There are also several studies to show that public enterprises performed better than private sector in similar circumstances, argues Sudhaman.

Private sector had neither the appetite nor the financial muscle to invest heavily in long-gestation infrastructure sectors like power, transport and heavy and basic industries, the journalist-turned-writer points out.

About the Author:

Nirendra Dev is senior Journalist. He is a longtime northeast watcher and author of books including ‘The Talking Guns: North East India’ and ‘Modi to Moditva: An Uncensored Truth.’