Closure of loss-making and sick PSUs was mentioned in an assessment meeting chaired by Secretary Rajiv Gauba on 12 August. He directed the officials of ministries to provide motives if there was a put-off in imposing the closure of such PSUs. Prime Minister Narendra Modi directed the ministries and departments to come up with a strategic plan to speed up the liquidation and disinvestment of those Public Sector Undertakings (PSUs) that already have cabinet approval for closure, confirmed by sources.
The nation’s government has sucked the collected revenue in the name of different payments to meet its short-term economic shortfall and disinvestment goals. This annual capital reserve was meant to be used to improve technologies and for investment outlay.
But now, the management is compelling these profitable PSUs to take unnecessary lends and purchase all of the stakes in the other unprofitable PSUs. It was done to meet the disinvestment goals. The management has asked the gas and oil PSUs to bear the fuel subsidies given to citizens for the sake of countering the growing fuel charges.
Growth Of PSUs In India
Talking about the PSUs, Government businesses are called Public Sector Undertakings (PSUs) in India. After independence in 1947, India had a shaky base with a handful of state-owned factories. A vulnerable commercial base, limited infrastructure, and the absence of skilled employees have eroded India’s key framework. Those few industries were not ready enough to stand out in the developing global.
They wanted brand new and effective coverage that could pave the way for their progress. The economic policy resolution of the 2d five-year plan proved to be worth mentioning structure for public companies, which were taken into consideration as an improved strategy for sustainable economic development.
To begin with, the establishment of roads, irrigation schemes, fertilizers and chemicals, and heavy enterprises were the main focus. Later, public sector establishments began manufacturing several items and presenting contracting, consulting, and transportation offerings. The growth was slow mainly because of unplanned administration and lack of experience.
First of all, 17 business sectors were allotted for the public zone under the Plan A resolution of 1956 with the provision that no new non-public sectors would be allowed in these classes. Any other list of industries in which the authorities actively advocated public possession was noted in listing B. Various sub-countrywide governments and the Union government invested within the established order and operation of public quarter corporations and firms.
In India, PSUs help in making a strong foundation for commercial development. With their awareness of infrastructure development and enlargement, these agencies have led to an economic boom. These groups have created process opportunities for lots of people. PSU’s goal is to increase exports and reduce imports.
Views of the Authorities on Closure of PSUs
A senior quoted that the officers have to ensure that there is no wastage of the term budget. In instances where the cabinet approves the closure of CPSEs (Central Public Sector Enterprises), independent bodies, and other entities, it ought to be implemented straight away.
The assembly organized with the assistance of Gauba spoke about the authority’s plan to put together for “vision India@2047”, a plan to make sure that India ranks among some of the world’s top three economies and moves in the direction of the developed country, for example, the United States of America.
PSUs are organizations wherein the direct shareholding of the authorities or other PSUs is 51% or more. There are 607 PSUs in which the government has a direct or oblique stake. Ninety groups had no longer submitted their monetary statements to the CAG at the time of submission of the records. Of the 697, approximately 488 are national organizations, six are statutory agencies, and 203 are other government-controlled groups. In its December 2021 document, the CAG stated that around 181 country-owned businesses posted a lack of Rs 68,434 crore. 115 suffered losses for 3 to 5 years, and 64 PSUs suffered losses for five years.
BSNL and Air India had been a few of the 14 agencies that incurred losses exceeding Rs 1,000 crore in 2019-20, consistent with the CAG file. However, Air India has now been privatized and taken over via Tata organization’s Palace. On the disinvestment side, the middle controlled to promote its stake in 3 companies – Oil and natural fuel company (ONGC), LIC, and Paradeep Phosphates confined (PPL) – raising around Rs 24,544 crore. In 2022-23, the authorities are predicted to raise Rs 65,000 crore through disinvestment and privatization of state-run firms.
Union Finance Minister Nirmala Sitharaman said in June that the principle behind the authority’s disinvestment application is not always to close the unit, however, to make them green and professional. She emphasized that the privatization of PSUs makes the operations of the firms more efficient.
Edited by Prakriti Arora