LETTER FROM THE EDITOR-IN-CHIEF
This month our cover story deals with Indian Airlines episode which was often termed as ‘Maharaja’ and ‘King of All Times’. Unfortunately, the airlines, which enjoyed absolute monopoly has lost its credibility and as on today its market share is one of the lowest. The airlines continued to suffer with losses and all earlier capital infusion in the Indian Airlines has gone to total waste. Today, airlines with a debt of Rs. 50,000 crore, is a white elephant, which is eating the tax payers’ money. The government has taken a decision to privatize this, but there seems to be a no taker to Maharaja. Our cover story this month deals with this issue.
When India attained its freedom on August 15, 1947, it was not producing anything. Industrialization was totally absent, except for few small scale units. There was a need for large scale investment. Such investment was not available with private businessmen. As such, the only option the government had was to start Public Sector Undertakings to bring Industrialization in the country and provide employment to the people. Initially, many of such Public Sector Undertakings produced good results. With the passage of time, they lost the monopoly character and had to compete with Private Sectors. In the process, Public Sector continued to become a financial burden for the nation. In India, 70 Public Undertakings (state run companies) were in loss as of March 31, 2019, with their total stress amounting to over Rs. 31,000 crore collectively. Out of these, state run carriers Air India, Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) were the top three loss making PSUs in the Fiscal Year 2018-19. This was informed by Mr. Prakash Javadekar, Minister of Heavy Industries and Public Enterprises, in a written reply to Rajya Sabha recently. According to the reply BSNL lost Rs. 14,904 crore; Air India’s losses were at Rs. 8,474 crore and MTNL’s losses stood at Rs. 3,390 crore.
PSUs such as Orissa Mineral Development Company Ltd., Chennai Petroleum Corporation Ltd., Hindustan Newsprint Ltd., National Textile Corporation Ltd., State Trading Corporation of India Ltd., also reported losses in hundreds of crores. The reasons for the failures of these PSUs were also provided. While the reasons for the failures differ from one PSU to the other, the most common being the obsolete plants and machineries, heavy interest burden, resource crunch, low capacity utilization, low productivity, surplus manpower, high input cost, non-remunerative prices, absence of professional approach, are just few attributes common to all the PSUs.
Further, one cannot deny the fact that too much of political interference has also brought these PSUs down to earth. Now, they have lost the relevance. The sooner the government move for disinvestment, the better it will be. The Budget 2021 appears to have an intention to move in this direction. The sum proceed of sale of asset must be used to create new asset, may be in health and education and infrastructure sector.
Let people of India be hopeful and patient.
Dr. K.K.JhunjhunwalaAdd a comment