By invitation, M Chuba Ao ::::::: "PSUS ARE NO LONGER ‘WHITE ELEPHANTS’ AND THAT’S GOOD NEWS"

 PSUS ARE NO LONGER ‘WHITE ELEPHANTS’ AND THAT’S GOOD NEWS FOR COMMON CITIZENS

“Under Congress, there were several problems in the administration of PSUs; but under Narendra Modi, the public sector banks and their governance form a formidable base of good governance model,” says BJP national vice president M Chuba Ao

Those who have developed a political culture of Narendra Modi bashing will try hard to find faults in the NDA government's economic policies. Politically they employ a politically 'saturation' tool saying jobs have been affected and PSUs are being sold out or closed. The truth of the matter is the public sector banks and their governance form a formidable base of the Modi government's good governance model.

Listed public sector undertaking (PSU) shares now account for 11 per cent of the Bombay Stock Exchange’s overall market capitalisation. This is certainly a key achievement. The PSU banks are leading the match towards greater glories -- something that was unthought about under the UPA regime led by 'economist' Dr Manmohan Singh.

 

The collective valuations of listed bank stocks is over Rs 11 lakh crore. Our very own State Bank of India (SBI)alone accounted for Rs 5 lakh crore.

In terms of other facts and figures. It started with five PSUs under Jawaharlal Nehru in 1951 and now there are at least 360 enterprises in the public sector in India. These enterprises including seven new defence enterprises accounted for a total investment of around Rs. 16.41 lakh crore in the year 2021.

Under Congress-led UPA, there were several problems in the administration of PSUs including banks.

Delays in decision-making, political interference, trade unionism vis-a-vis absence of a result oriented work culture, lack of business acumen/aggression, and bureaucratic red tape had resulted in lack of innovation and ultimately poor balance-sheet. But the Modi government held the bull by its horns and took a few necessary steps.

The Modi government realised that PSUs have truly played a vital role in India's economic growth and development. These government-owned entities have been 'instrumental' in creating employment, building infrastructures and also providing essential services to the people of the country.

 

The dividends drawn are worth cherishing. As many as 55 PSUs reported over 150 per cent jump in net profits between 2018 and 23 to over Rs 3.5 lakh crore.

There has been another interesting development too. The Modi government legislated the much-needed Insolvency and Bankruptcy Code, and the Reserve Bank also directed all PSU-banks to reveal their bad loans. This helped the market do the scrutiny automatically. In contrast, the Congress leaders may now seem to have forgotten that during the Manmohan Singh dispensation, the facts, figure and "scars" suffered by PSU bank balance-sheets were kept well hidden.

 

We should not forget, under the economist PM, the UPA regime, the PSU banks had faced mindless lending splurge. During the Modi government, Parliament was informed that loans totalling over Rs 8,000 crore were given to 'absconding industrialist' Vijay Mallya in 2004. This loan was reviewed in February 2008 and an amount of Rs 8040 was declared a non-performing asset (NPA) in 2009. The same was again restructured in 2010.

So much for the Congress claims on their efficiency.

Look at another sector - civil aviation. The Modi government has taken the much-required corrective measure and the sick Air India was sold to the Tatas. The result was a huge drain on the exchequer is now no longer a government or for matter an ordinary taxpayer/citizen's concerns.

 

Before I conclude, one must refer to the economic reforms and privatisation as a policy. This policy is generally opposed by communists and left trade unions. But our national experience is different. In some cases, privatisation has saved government money and also helped bring improvements in some prominent PSUs. One knows of Congress leaders who admit that the 'privatization of Delhi Airport in 2006' (that is during UPA) had resulted in an improvement in the airport's infrastructure and services.

 

We all know of Sanjay Gandhi's pet project called Maruti Suzuki. It was privatized in 2003 when Atal Bihari Vajpayee was the Prime Minister. The result was after privatization, the company saw a significant improvement in its financial performance. VSNL, Videsh Sanchar Nigam Limited (VSNL), is today better known as Tata Communications. It is one of the largest telecommunications companies in the country. VSNL was also privatised by the Vajpayee government in 2002 and it did help.

The moot point is there is need to appreciate the reforms and privatisation wherever necessary. These are the realities of our times and also much essential measures. The outcome is worth cherishing. The public sector companies are now on the rise and there is a four-year high in market valuation.

 

(M Chuba Ao is BJP National Vice President. Views expressed are personal.)