[av_heading heading=’India’s public sector undertakings, described by many as crown jewels of our socialist legacy, are sinking deeper into losses. Some profit making PSUs have begun slipping into the red and some others have started reporting wider losses. ‘ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’1′ color=” custom_font=”][/av_heading]
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| India’s public sector undertakings, described by many as crown jewels of our socialist legacy, are sinking deeper into losses. Some profit making PSUs have begun slipping into the red and some others have started reporting wider losses.
According to a written reply in Lok Sabha, the combined losses of 78 CPSEs rose by almost 55 percent in FY16 over the previous fiscal. So from Rs 18,485 crore in 2014-15, the combined losses of these entities climbed to Rs 28,756 crore within 12 months. That means, on an average, these companies posted a net loss of about Rs 79 crore each day of FY16 versus almost Rs 51 crore in 2014-15. If one were to take just the top four loss makers – Steel Authority of India, BSNL, Air India and Hindustan Photo Films – these companies alone accounted for over 50 percent of the total losses in 2015-16. Why does government continue to make steel, why does it own an airline or a telephony network when the private sector has long overtaken typical bureaucratic inefficiency in each of these sectors – and is itself While the other three in this list are habitual loss makers, SAIL is the newest entrant in the top loss makers’ club. The steel maker had reported a healthy net profit of Rs 2,092.68 crore in FY15 but slipped into the red the next year with a net loss of Rs 4,137.26 crore. Rashtriya Ispat Nigam is another steel PSU which slipped into losses last fiscal, from a net profit of Rs 62.38 crore to a net loss of Rs 1,420.64 crore. Profit making BHEL also met the same fate, posting a net loss of Rs 913.42 crore last fiscal against a net profit of Rs 1,419.29 crore. So why are the loss making CPSEs sinking deeper and in fact adding members to this loss makers’ club? Minister of State for Heavy Industries and Public Enterprises, Babul Supriyo, said in the Lok Sabha reply that “the reasons for losses in CPSEs vary from enterprise to enterprise. However, some common problems for losses in CPSEs include old and obsolete plant and machinery, outdated technology, low capacity utilisation, excess manpower, weak marketing strategies, stiff competition, heavy interest burden, high input cost, resource crunch etc.” Though the Prime Minister’s Office has already asked the NITI Aayog to examine the viability of ailing state-owned companies and the NITI Aayog had earlier submitted two separate lists of sick and loss-making PSUs for evaluation. NITI Aayog had apparently identified those loss making PSUs that can be closed down and made another list of those that should be privatised through strategic sale. Source – www.firstpost.com |
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