Indian PSUs: Is A Metamorphosis Possible?

- Jai Mrug

BSNL was incurring ₹8,000 crore loss in 2014. But today it has earned an operating profit of ₹672 crore in just one and half years’ time,” proudly claimed IT minister ravi Shankar Prasad, while addressing a ‘Vikas Parv’ function organised to mark the completion of two years of the Modi government.

Air India reported a profit of ₹105 crore in the last financial. Air India Express, the low-cost international operations subsidiary of Air India, also reported a profit of ₹362 crore in 2015-16 for the first time since 2005. The Indian railways, however, continued on a losing streak with the dynamic passenger prices falling, as well as freight revenue growth not being encouraging.

PSUs over a period have evoked only extreme reactions. These range from global scale giants to tardy and wasteful entities that look anachronistic today.

While numerous thought-provoking discussions have taken place including the usual stories of privatisation of PSUs, the word ‘unlocking the potential of PSUs’ will be best understood only when we accept and ensure that the rationale for their existence and their core goal is cast in stone and every other thought revolves around it.

PSUs are more than business entities, though they seek to be run like one, at least in the financial perspective. Often, their core objective includes looking beyond immediate and short-term profitability and includes areas where national control and pride are associated. They are meant to be the driver of change across the country, besides a channel to deliver the benefits envisaged by the government for its people.

At the outset, PSUs are sought to be created where capital investments are huge and products and services are to reach across the geography and demographics and ensure basic essential services like food, water, electricity, healthcare, education, communication, transportation and banking.