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  • Category: Miscellaneous

    Hiding incompetency by divestment of state run companies to the tune of Rs.80,000 crore.

    I was going through the budget for 2019 when I just happen to see a very interesting point which we generally overlook as we are mostly interested in tax rates, deduction, rebates, benefits for women, etc., The point was regarding disinvestment target of Government for the current Financial year 2018-19 i.e around 80,000 crores.
    Just looking at the figure my mind started to dwindle as this gave me an impression that as to how much the government has invested in state run as well as centre run companies. Disvestment is actually good as the capital expenditures will be reduced and the money realised can be used for more productive work. But this also gave an impression of the incompetency of the government sector ubitsvas they are unable to utilise the huge potential they have in form of capital investments
    Not only divestment but also many of Government companies are put on sale as in case of Air India, which on date remain unsold.any more government companies have been put up for sale like HLL Lifecare Limited and many more.

    If we try to understand the impact of the incompetency of these government run companies on general public them it can be made out that the fund collected from us in the form of tax is invested in these companies to generate more employment and bring about development but on the contrary the money gets stuck in capital items and no revenue is generated and atlast after wasting many years of resources these company are divested. Thereby either shutting them down or giving them to private players to run it effectively. In addition government takes credit that they have plugged the cap on revenue leakage wherein they have failed to manage and grow the company they initially setup.

    Is government trying to gain brownie points even where it has failed miserably.
  • #638191
    Wonderful topic raised by the author. Yes this matter has to be deliberated and discussed in full. What I opine that when the government wants to invest in state run or central run organizations and companies, they want to keep their confident persons at the helm of affairs to manage the show but their past credentials are not verified. So giving a bigger responsibility to a person who is not having earlier experience of converting a loss making venture to a profit making is not possible. Moreover the laxity, slow progress and not taking professional decision timely are some of the main drawbacks of some government undertakings suffering losses.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #638202
    What should the Government do? Carry on the burden of loss incurred by unproductive PSUs? And the way has been shown by the Congress Government of PVN Rao when he started disinvestment of profit-making (yes, profit-making) PSUs like BALCO and HZL.
    Beware! I question everything and everybody.

  • #638206
    The Organisations which are making a loss in the government sector is to be privatised and in that pursuit, the government will get some money also which can be used for some other important works that will make the nation to have some development. The government-owned companies will be in the loss not due to the inefficiency of the process but due to corruption in all levels. If the same company is privatised they will bring the unit to profits within no time.
    When we are not able to run the companies properly it is very good to hand over the units to someone who will be able to make a profit making company as it is not possible in our nation to make the administration to make corruption free. I know a company in TN where the managers are taking percentages from the suppliers and hence the company has to purchase raw material at a higher cost than the similar companies in private sector.

    always confident

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