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The thread 'Pitching for privatising PSU's as Officers fail to manage them' has now been converted into an Active GD after making necessary changes in the content.
  • Category: Miscellaneous

    Active GD- The privatization policy of the center is a welcome move- Agree or Disagree?

    Remaining glued to its concrete policy of privatizing Public Sector Undertakings, a proposal has been made in the Union Budget by the Finance Minister, Smt Nirmala Sitharaman, for selling out government stakes in more PSUs with a view to raise resources. It is not only the PSUs or banks that are running at a loss that is being privatized. Prime Minister Shri Narendra Modi has also indicated that most of the Public sector units and enterprises are not performing well thereby proving to be a drain on the economy and has opined that privatization is the only way to bail out the loss-making units.

    The government has given different reasons for its decision while a few experts are of the opinion that it has got nothing to do with the poor or average performance of the PSUs and have directly linked it to the privatization drive by the centre and have questioned the ulterior motive behind such a decision that has wide repercussions. The NITI Aayog has been asked to submit a list of non-strategic PSUs to the Cabinet to decide on disinvestment. The proposal has received applauds as well as wide criticism.

    That being the background, let us discuss whether privatization of PSUs and Banks is a welcome move or otherwise. All aspects related to the disinvestment policy including the reasons for such a move, the effects and possible outcome may be discussed in this Active GD on the topic -The privatisation policy of the centre is a welcome move- Agree or Disagree?'

    Important Note- Please do not reduce this GD to a mere political discussion. While the participants are free to hold on to their political inclinations, please remember that we are more interested in the financial, business and employment implications this policy would create. Strictly avoid personal references to any leaders or bureaucrats that may be derogatory in nature. Any remark that is felt to be transgressing acceptable limits will be removed immediately.

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  • #723006
    PSUs won't start making a profit if they are handed over to private entrepreneurs just because PM Modi says so. The privatisation drive is basically not actually related to profit or loss. It is part of the administrative strategy of the centre. If public sector units are not running profitably, I believe the government has the responsibility to find out the lacunas and correct them. Instead of doing what they should be and by latching on to their privatisation policy, I don't think the government is doing the right thing. They are putting the job security of the employees and the possible revamping of such companies to benefit the government exchequers at stake.
    'Mastering others is strength. Mastering yourself is true power'. -Lao Tzu

  • #723007
    Why most of the PSUs are not performing well has to be found and proper restructuring plan for them must be there. Is it a guarantee that after privatisation the same workforce would be retained? No private organization is going to give such a guarantee and they will also not keep a section of their workforce idle. Instead of taking the initiative to privatize almost everything, I fail to understand why the government is unable to find a solution to make them profitable. Is there any dearth in the competency of the government or the employees working there? If the government stops interfering and politicising the workforce of the PSUs there is still chances to revive those units. Here I would like to mention the case of Air India. The plan of the government to privatise Air India is going on for years now and still, they couldn't do it. For a poor country like India, the privatisation drive will not augur well for the economy of the country. When most of the things will be privatised, the products or services provided by those companies will be priced much higher and a lot of common men won't be able to afford them. Will it be good for the economy then? I doubt!
    Sankalan

    "Life is easier when you enjoy what you do"

  • #723008
    Finding out the reasons for not making profits and plugging the leaks from where funds are draining is one solution to revive the loss-making Public sector Units. But who has to do that. The government should appoint a committee to do this and submit the report. Once the report is given that should be implemented without any exemptions so that the unit will be on the track.
    But the main problem is the attitude of the top officials working in the unit. They never take that as their responsibility. There is no accountability for them. They keep their personal agenda ahead of the organisation. The salaries and perks to the topmost officials should be linked with the profits of the company. In such a case, the officers may think about the organisation. If you calculate the cost of production in a PSU will be very high than that of a private unit. Why? This question is to be answered for understanding the reasons for loss-making.

    drrao
    always confident

  • #723042
    Privatisation is a new way to revive the economy. The banking sector will also be privatised. Bank employees unions have been showing their anger and resentment against the proposed privatisation of the banking sector.
    Opposition parties have claimed that present government didn't establish any new industry, scientific research centre, technology-institutes etc. They also claim that these assets were created by previous governments and now the present government is selling these assets. Opposition parties have no other work but to keep criticising our government. The present regime wants upliftment of people and development of the country but they are creating unnecessary problems for the government.
    They are making false allegations against the government that not only sick public units are being sold but also those units which are running in profits are in pipeline. Why these opposition parties do not realise this fact that they are no more relevant in Indian politics. Indian people want to see only one-party rule this country, and every policy of the government is great and beneficial for people as well as the country. I think we should support our government.
    What should be done against these opposition parties? I think all Indians who support the government should protest against all these opposition parties to stop them creating a nuisance.
    We are stepping in new India where we will have worldwide big companies working in our country. Where the living standard of people will go up. The middle class most probably will disappear, either they will go up or go down below the poverty line. We will have a clear demarcation between rich and poor and the wall between these two groups will be very thick.

  • #723043
    The lethargic attitude of govt employees not producing results leads privatizing thoughts.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #723045
    What attitude, Mr Mohan? Why blame the employees? Isn't it the duty and responsibility of the employer to ensure that the employees produce the desired results? A good employer/ leader must be able to motivate, guide and inspire his employees and followers. Pat their back when they do well and kick them when it is needed. Demotivating the workforce by putting all the blame on them will have wider repercussions which will not be in the interests of our economy and development in the long run.

    Mohan, it is fine to praise someone whom you follow but please be practical. One need not be nobler than the king.

    'Mastering others is strength. Mastering yourself is true power'. -Lao Tzu

  • #723058
    @K.Mohan:
    I agree with you that it is the lethargic attitude of government employees which has caused this poor condition of the public sector.
    They don't perform their duty efficiently, this is why these public units are not giving positive results, rather, giving loss to the government. Now they have become a heavy burden on the government.

    It is the Congress party which let them show this lethargic attitude for last (more or less) 70 years. Congress government did not control them and so these government employees became too dull in performing their duties until they are offered some extra money under the table.
    And the present government has no option except giving these public units in the hands of private players.
    Now after privatisation whole system will come in order.
    e.g. When Indian railways will be privatised then all trains will run on time. Because now they will no more be Indian railways, they will be Adani railways or Ambani railways. This is why the whole system will be renovated. The government will also be not responsible for fare rising or price hike of commodities. No passenger train will run. We will have deluxe coaches with the latest railway engines as you see in the US and Europe.
    What is the point of giving Rs 50k to an employee, rather they will employ 5 employees for Rs 10k each instead? In this way more jobless youth will be accommodated in the private sector.
    Black marketing will be legalised and these private players will sell essential commodities on higher rates.

  • #723076
    For example once upon a time the ECIL which was producing very good affordable television sets was gradually marginalized by the private brands and thus the division itself was closed. Is it not the lethargic attitude of the officers who are at the top of the management?
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #723078
    The main reason behind the loss of PSU is the lack of accountability of the top officials. There has not been clear cut demarcation of of their responsibilities. Let the jobs of the executives be defined first and failing in their areas should be treated as one of major lapses in discharging their duties. If you have visited a public undertaking in the past, you might have witnessed the the strength of the union leaders inciting the workers indirectly to hamper the production of the shops. The workers were found reporting to their workshops any time they wished and the management was silent on this front because of stronghold of the unions.Due to such attitudes, many PSU including FCI, HEC have failed miserably in terms of production and revenue generation. However, this was not the cases with all the PSUs. Some were highly productive but the demand of the finished products dropped heavily due to the current pandemic phase. A committee is to be set up prior to disinvestment so that some of the ailing units are to be identified which requires the revival of market. They should be given some grace period before taking the decision of their disinvestment.

  • #723080
    And talking about FCI the godowns are not maitained properly and the rodents eat away the farm produce. Who is responsible for this lethargic attitude.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #723090
    I am also in support of privatization because It is beneficial to consumers in many ways. It promotes competitive environment by breaking a monopoly in open market and costumer can get good services at cheaper prices. Private sectors also give top priority to our customers besides providing job opportunities to every segment of society and try to make the balance between producers and consumers. Due to controlled outsourcing of services in the private sector, this sector has the capability to sustain in the open market by providing quality services and goods.

    The government should definitely do the privatization of loss making PSUs. However, not all PSUs are going in loss some of them are really doing very well. But privatization is current need. Privatization is required to run the organisation on a fast pace and to maximise the benefits. Many PSUs like BSNL, Air India are making huge loss. Privatization of a company will offer the private management to run the company which will increase the profit of the company and is the best alternative. Due to less competition, performance of PSUs is degrading. Except some PSUs, most PSUs are not performing well and making loss. After privatization, the company will become more result oriented. Performance of the company will be improved. So, privatization is necessary to improve the efficiency and economic stability of a company.

  • #723091
    The privatization policy of the center is not a welcome move and it is a dangerous experimental decision taken by the center. Once the center has taken such a decision indicates it is inefficient in maintaining PSUs and unable to garner the full benefits of them to the country. If it is the case, what is the role of government for the country? Is the government simply keeping the government activities to outsourcing people like foreigners? Then what is the call of self-reliance and Make in India? It seems the government tries to shell out all companies irrespective of their stature to get some money out of this to show off the fake economy of India. If these companies who buy these PSUs fail to maintain and get into losses and close, what benefits the country get? Suppose if they are successful and if they sell their products at a higher price to consumers and for the government then how we get benefited?

  • #723099
    I am in favour of the Govt privatisation policy and though it is quite delayed but still it can be done in a planned and strategic manner. If we recollect, earlier the banking sector was in a very bad shape and customers had to wait for their work for hours standing in a queue in a Govt bank. After the inception of private banks the Govt banks also got a feeling that they have to improve otherwise they will be out of the business soon. I have witnessed phenomenal improvement in some of the Govt banks also though private banks are still ahead of them in customer satisfaction.

    The only way to increase efficiency and performance in our system is to go for privatisation. It has immense potential for job generation through industry expansion. Many people argue that we have to improve the working of the PSUs and Govt departments. Unfortunately this is a wisful thinking as we could not do it in last 73 years so how we are hoping to do it now. The laziness of the employees cannot be removed in one day. The system is rusted and if we force it more for making a change, it would simply collapse.

    Today technology is advancing in a rapid pace and every month we are seeing new gadgets in the market. These are being produced in private companies only. Many ambitious projects in the world are being pursued in private sector only. For progress and performance improvement privatisation is a must.

    Knowledge is power.

  • #723102
    Now I will give what are the cons of privatization of PSUs and Banks and how it will affect the public and country.
    1. Firstly, the government shell out PSUs at a cheap price (government rate or the rate at which it is bought at the time of establishment). For example, the Visaka steel plant of AP, the center spent simply 5,883 crores to establish the plant with 6000 acres of land. But now this plant in the present market values several thousand lakhs of crores. Now to privatize the PSU, the government may sell out for a cheap price. Then this will be a heavy loss for the country as well as for the public.
    2. Private sectors concentrate more on profits and less on social objects. Price escalation of products is the most disadvantage faced by the public because of monopoly.
    3. Understanding between private sector companies and government leads to corruption practices in government, loss of revenue through taxes, inflation of prices.
    4. Salaries given to employees get reduced and security of jobs at stake.
    5. Private organizations always interested to establish demanding and profit giving industries and neglect establishing small profit giving industries.
    6. Escalating costs of education from KG to PG in private institutions, treatment in private hospitals give a true picture of the ill effects of complete privatization.
    7. PSUs provide heavy dividends to the government while it is a loss with private sectors.

  • #723106
    #723042, Through your argument, what I understood is because Indian people elected BJP to lead the NDA government democratically and so whatever they do people have to obey and follow as silent spectators. There is no need for even opposition parties to protest these reforms. It is a democratic process in which 45% of voters voted for NDA and the remaining 55% not favored the government. So what Mr.Modi's government does is not the perfect thing. People and opposition parties can show their dissent if they find any problems in their ruling. You cannot call this a nuisance in democracy. Maintaining PSUs and banks with profit margins is the duty of the government. If they fail in that duty will tell the efficiency and capability of this government. Why certain PSUs are doing well and others not? It is because of inefficient management and control of the government.

  • #723107
    I am unable to understand what Arafatuzzafar @#723042 meant to say in the very last sentence of his response. He mentioned 'We will have a clear demarcation between rich and poor and the wall between these two groups will be very thick'. Then, will it be a sign of a good economy or a completely imbalanced economy where the riches will have everything and the poor empty-handed? If he thinks it is the possible outcome of the privatization drive of the government then that will be disastrous.

    There should be private companies in every sector so that a healthy competition between the government-owned companies and private companies exist but I am against the privatisation policy of the present government where it wants to sell out its stakes in most of the PSUs and banks. The PSUs which are really loss-making and there is no chance of restructuring them can be privatised but the case is not such now. It seems the government is on a spree to make everything privatised. I have seen a few members have pointed out that services offered by private companies will be much better and available at a cheaper price which I cannot agree with. Let's think about the health sector. I would like to know if there are more private hospitals and nursing homes all over the country are they going to provide treatment at a cheaper cost? I would like to know how many in our country will be able to afford the cost of treatment in private hospitals and nursing homes if they do not have a mediclaim policy? Do you think the government clinics are not making profits? When there were many mobile telephone service providers in our country the call cost of BSNL was cheaper compared to the private operators but their network was not good. The internal politics of BSNL is completely responsible for the degradation of service. Be it the railways or the banks the present government wish to declare in the public domain that most of them are loss-making and hence privatisation is the only solution without thinking of a restructuring plan for them. Think of Indian Railways. Is it running on a loss? The present railway minister has informed in 2019 that in the years 2017-18 and 2018-19 the surplus from the railways was around Rs 1,665.61 crore and Rs 3,774.51 crore respectively. It is not making any loss then why the move to privatise it? The job of the government is to manage and not to outsource the assets as correctly mentioned by Ramakrishna Kambhampati @#723091. The government has to think of the economic condition of the people in general. India is still a poor country.

    Sankalan

    "Life is easier when you enjoy what you do"

  • #723109
    #723091

    Government can control private companies by enforcing laws, rules etc. and privatization can only make India self-reliant. Government is continuously taking initiative to make India self-reliant. We all know that when all were scared about draining economy around the world on the outbreak of COVID 19, Government of India made an effort to develop an Aatma Nirbhar or Self-reliant India to keep our country on track under which Global tenders will not be allowed in government procurement tenders up to INR 200 Crore. Under this initiative government is providing opportunity only Indian/ local companies to participate in Government tenders up to INR 200 Crores. It is a huge support to expand our micro, small and medium enterprises (MSMEs). This initiative will also eliminate the chances of partiality to our local companies from foreign companies.

    Further, PSUs are also going in loss and are becoming a burden over government ultimately. It is better that Government privatize these companies so that their efficiency and performance can be improved. Remember, we are able to use 4G and 5G only due to the privatized telcom companies.

  • #723110
    #723102

    1. The government will sell the stake at the current market price only so it will not create any loss to the country further, it will garner the required fund and technology to run these companies and boost the investment.
    2. Due to competition among private companies no monopoly will be there and people will not face any issue of product quality and prices. Further, Private companies abide to follow Corporate Social Responsibility and spent upto 2% cost of the annual profit. However, government sector or PSUs are not in the purview of this law.
    3. Issue of corruption is not to be discussed here as it is everywhere and more in Government sectors.
    4. Salaries given to employees may or may not be affected but there will be numerous jobs opportunities and younger generation and more efficient people will get a job.
    5. Small profit industries are not neglected. Now Indian Government is focussing in make in India and self-reliant India and encourage the small scale industries.
    6. Cost of education in private schools/institutes and medical treatment in private hospitals may be higher but facilities/technology are also higher.
    7. Of course, PSUs provide the heavy dividends as they are government babies but what if they are going in loss?

  • #723111
    #723109, If foreign companies establish their companies in India and they flourish and they make a major profit out of it. India will get a very small portion of its profit in the form of revenue and taxes. For example, Mi mobile company has a unit in Tirupathi of AP. Even though the mobile phones are manufactured in India we call these mobiles as China phones only. Can you call this as self reliance? If more foreign players enter India what actually aatma Nirbhar then? There is no standard company in India that can make a mobile phone on its own? Even government allows Indians only there will be no one to take up the challenge? You are mentioning about partiality related to government. Mr.Modi's government gave management of 6 Air ports for 50 years to Adani is against the laws of Indian government that a
    it can be leased only for 30 years. Mr.Adani's company has no past expertise in this field. Mr.Modi government gave Raafel defense deal to Ambani 's company which has no past expertise in this field. CAAG and NitAyog in their reports strongly condemned this type of false practices by the government. This type of corruption practices of present government show its honesty in privatization of PSUs and banks.

  • #723113
    Hi everyone, it is a welcome move by the ISC admin to convert this thread into a GD topic. This is one topic that is close to my heart. In fact, if by any chance this privatization move by the central government finally materializes, it can affect my ability to earn bread and butter for my family. After all, like lakhs of PSU employees, I too earn my living by working for a leading Public Sector Undertaking. So I guess, I am in a good position to offer my views on the pros and cons of the privatization drive of the present government. Many of my friends have already given their views in favour of the move and some others have opposed it. Every one of you is right from his or her perspective since it is one decision, if not implemented wisely, can make or break the country's economy. It may lead to unemployment or perhaps thousands of new jobs and opportunities may get created for the country's unemployed youth. It may lead to chaos or it may lead to greater order. What will ultimately happen is very hard to guess, but we can anyway discuss the merits and demerits of such a move, till the time they are ultimately implemented. In subsequent responses, I will be putting forward my views on this hot and burning topic, which many fear, if implemented, is likely to affect the livelihood of lakhs like me.
    Patience and perseverance pays

  • #723115
    #723111
    If foreign companies establish their companies in India and they flourish and they will make profit. But india will also be benefitted by increase in GDP. Stocks in India will get benefitted from foreign investment. The government motive behind the self-reliant India is to merge local with global to show the strength of India and transform India's passive market to an active manufacturing hub.

    Further, there are several restrictions on foreigners for investment under different sectors. Foreign investment will enhance technology transfer between two countries. However, there are several indian mobile brands. Under make in India programme to boost domestic mobiles phones manufacturing Government has planned a production-linked incentive (PLI) package of Rs.42000 Cr for making and selling high-end devices.

    As far as the government partiallity is concerned, you have given the examples of Adani and Ambani that they have no past expertise. But they have setup their own business and got success and set landmarks.

  • #723117
    If we examine the pay and salary structure in both in private sector and in Public sector the definitely the PSU one is lucrative. But at the same time they are not able to add value to their business as they are working under the complex Govt working regime. They work in a traditional pattern and lose their time in formalities rather than the realities of this world. With privatisation Govt will stop paying fat salaries to the people employed in these PSUs and that itself will be a big gain for the Govt. When companies flourish Govt gets taxes from the companies as well as from the consumer in form of GST. So the proposition for going in a privatisation mode holds much merit.

    There is a general apprehension in the mind of the public that jobs will reduce. Yes, that is true but which jobs would reduce? Actually it is the fat salary jobs which will reduce and in our country from a socialistic perspective fat salaries should not be there. In such a populated country rather than giving a fat salary to some PSU or Govt workers, it will be prudent to employ people in industries at a medium salary. That is the only way to progress in totality taking all the unemployed persons with us in the developmental race. Moreover, when privatisation is there then people will have to search for self employment opportunity and the atmosphere will be of performing and not of lethargy that is very obviously evident in the corridors of PSUs as well as Govt departments. Our systems require drastic overalls and privatisation is one in that direction.

    Knowledge is power.

  • #723126
    Before I go into the pros and cons of this privatisation drive by the government, let me first give you a bit of a background details of the PSU where I work at. Ours is a Maharatna PSU with manufacturing units and project sites spread across the country. It has a manpower strength in tens of thousands. Established way back in the 1960s, it was in profit until a few years back. However, over the years the business dynamics have changed. No more does the company enjoy a monopoly like it used to in previous years. There is a huge competition from the private companies. There is competition from the Chinese too. Add to this, in recent years, the business sentiment in the country is down. Orders are very rare these days, and whatever orders we get, there is not any profit margin in them. Many of the orders the company is taking at loss, just to keep the money in flow, the machines to keep running and for the workforce to get some work. The corona too played havoc with the company's balance sheets. Because of all these factors, our company is now seeing losses every quarter. With no new orders coming, the future seems bleak. We are trying to divert to other businesses and products, but the income from them is in peanuts, hardly enough to sustain the monolith that we are. As a result, there has been drastic cuts in salaries; DA has been put on hold, no bonuses, no incentives, no free meals and no free education for the employee's children anymore. As permanent staff, we are still lucky; those who work as contract workers are losing their jobs.



    From the above scenario, I hope you all can visualize what a mess our company is in. And the worst part is; this is not only true for our company, but for most other PSUs also. In recent years, even though these PSUs have been a source of employment to many, they are proving as a big burden to the government and in turn to the country. Sure, we need to find some solution to come out of all this mess. Whether, privatisation will be the panacea for all these ills or not, only time will tell, but we can anyway discuss. Will come up with a few points in my next response.

    Patience and perseverance pays

  • #723147
    Many have opined that privatisation will generate more jobs for the youth but how will it be possible? When a sick unit is privatised, the motive of the privatised firm would be to generate more profits and for that, rather than employing more people, they will think of reducing the number of employees. In a PSU, each official is responsible for a particular job and will not look after any other job. Though I do not support this attitude, in private firms one employee is responsible to carry out more tasks and they look for those people who can handle many tasks at a time. Therefore, the required number of employees in a private firm is much less compared to that of a PSU. So, it is a wrong perception that privatisation will generate more jobs. Fresh investment in any sector undoubtedly will generate more jobs but taking over a sick unit by a private entity is not going to generate more jobs. I agree that sick units are a burden to the government and there must be a restructuring plan for those units and if it is found that privatization is a viable option then go for it otherwise do not make it a policy of privatising most of the firms irrespective of their profitability.
    Sankalan

    "Life is easier when you enjoy what you do"

  • #723150
    Privatisation is most effective way of productivity which will creates jobs also in long run. It will increase efficiency of people and if the jobs will be cut than the salaries offered will be higher for less employees. But skilled persons will have the more job opportunities.

    Further, the sick units whose restructuring is not possible it is better to privatise them so that the private management will run these companies better. Right now Government is raising them like babies. The PSUs were established for the welfare of the public. But due to non competitiveness most of them are failed to do their jobs and making loss now. So it is better to handed over them to a better management and it is the best option.

  • #723154
    Very good GD topic but not agreed with the view of privatisation. Because, basically it is not so called disinvestment policy, it is simply a clause in the income flow head income from stake sales.
    Govt. will never loosing their mejority holdings of PSUs in our country. They are trying to collect money from selling a small portion of high profit making PSUs for revival of sick one. There are a few employees of every Pvt. and Govt. Sectors who does not take the responsibilities and are manage in any unnatural way, that should not be the example of employee nature. Our PSU required heavy Capital investment plan which may not be suitable for pvt. Owner. Various policies of govt. will Defeat, an example : SAIL, COAL, ONGC ,NTPC etc is the giant PSUs , coal are used basically for electricity generation, govt has fixed the coal price for Power generation company which is very low even at a 50% below their cost price so that the cost of electricity remain lower that can reach to every house. So private companies will never permit this, accordingly the value will be much higher. Regarding employment generation I think the true utilisation of manpower budget is possible in Govt sectors only. Employment opportunities will be much lower under pvt. Sector. Labor Act are not properly followed in pvt sector, so it is not good for the interest of the employees. There are various social responsibilities which a govt. PSU can complete rather than a Pvt.sector.Hence we all should upgrade ourselves to think my company as my own things and act accordingly so that pvt. or govt status will not arise. Thanks.

    Believe in the existence of God the super power.

  • #723155
    There are some eaxmples where a PSU performed well after privatization. An enterprizes named Hindustan Zinc was sold by the government in 2002. The company performed well with improved efficuency and raising shareholders wealth due to privatization and change in management and became the world's second-largest zinc-lead miner and one of the top 10 silver producers.

  • #723160
    Some member has put their point that privatisation is not good as it is not a deinvestment policy but a deinvestment is also a good option but it can only help to generate revenue for the Centre and not the condition of a company while in privatisation a private management will run the organisation with the aim to maximize the benefits.

  • #723164
    When the center is moving towards complete privatization then is there any logic and strategy behind it? Some of the best white elephants like organizations Bharat Petroleum Corporation Ltd., Navaratna companies, LIC, ONGC, Coal mines, Steel plants were in the pipeline of disinvestment. LIC presently holds 35 lakh crores worth of assets and that is equal to the annual budget of our country. Is there is any logic behind such disinvestment? Can anybody or the government that framed the reform can explain the logic behind it. It seems the government policy is to liquefy everything to show in the form of cash. Is privatization simply solve every problem that government intends to do? I will give a number of examples that privatization failed on all counts. There are not only Public banks but so many Private banks that also failed. You may say so many private banks outshining public banks. But Private banks like Yes bank, Sahara Bank, Global Trust Bank, Times Bank, Sikkim bank Ltd., etc. are private banks that failed. So some private banks excel and some fail means, it is because of their mismanagement and improper organization. For example, the power supply DISCOMS India failed miserably in bringing profits or even proper maintenance and collections. In the 1990s water reforms started were an opportunity given to the largest water supply developer JUSCO failed miserably. Many private Air flight operators in India run into losses. when the center is moving towards complete privatization then is there any logic and strategy behind it? LIC presently holds 35 lakh crores worth of assets and that is equal to the annual budget of our country. Is there is any logic behind such disinvestment? Can anybody or the government that framed the reform can explain the logic behind it. It seems the government policy is to liquefy everything to show in the form of cash. Is privatization simply solve every problem that government intends to do? I will give a number of examples that privatization failed on all accounts. There are not only Public banks but so many Private banks that also failed. You may say so many private banks outshining public banks. But Private banks like Yes bank, Sahara Bank, Global Trust Bank, Times Bank, Sikkim bank Ltd., etc. are private banks that failed. So some private banks excel and some fail means, it is because of their mismanagement and improper organization. For example, the power supply DISCOMS India failed miserably in bringing profits or even proper maintenance and collections. In the 1990s water reforms started were an opportunity given to the largest water supply developer JUSCO failed miserably. Many private Air flight operators in India run into losses. A total of more than 200 internationally acclaimed Private Sector units who established their business in India from 2012 onwards failed miserably and closed their units. These Private sector units included Reid& Taylor, Smaash, Harley-Davidson, Atlas Cycle, Thomas Cook, etc. So it is improper for us to say because of private organization it can excel and it is because of PSU it fails. ed Private Sector units who established their business in India failed miserably and closed their units. These Private sector units included Reid& Taylor, Smaash, Harley-Davidson, Atlas Cycle, Thomas Cook, etc. So it is improper for us to say because of private organization it can excel and it is because of PSU it fails.

  • #723169
    What I strongly feel is - Government should not run any business establishments to make money. The government should simply sit and earn from business establishments through taxes. I would say that there should not be any PSUs in our country. Running PSUs increases the botheration of the government. If at all, the government runs a welfare unit, it should be from the income earned from other sources. There should not be any subsidy. The government should not bother about direct employment in government organizations except for the administration of the country. But they should create many private business establishments to provide employment. The government should help to set up many private industries and factories to provide employment and to improve our economy.

    Government is to manage the country, not for money-making, but to get the money indirectly. Government is for the safety and security of the country. Government is to care for the citizens of its country.

    If privatization takes place, there would be competition. If there is competition, there would be betterment and improvement. If there is betterment, there would be the attraction. If there is attraction, there would be good earning. If there is good earning, the government would receive good revenue. If there is good revenue, our economy will grow.

    No life without Sun

  • #723170
    While I insist on privitasation of some of industries for revival of their health needing due structuring such industries will show its competitiveness in terms of productivity and financial profit. Though it is the essential parameter to flourish under the present regime but it does not mean that PSU cannot maintain the healthy culture of raking profits with slight modification of their policies relating to deployment of man power in some key units.
    Our main thrust should be a healthy culture uplifting the production with the proper alignment of manpower.

  • #723173
    The very basic question one should answer is why the industry has to work? What for it is established? Is it working for the goal with what the factory is started? Private industry will make a profit but not a Public sector Industry Why?
    When I feel it is my money I will take care of it. I will see how much we are spending? How much I am getting back? Is it worth my struggle? Once that MY feeling comes the entire work culture will change. A PSU has to meet its expenditure from the resources it is getting or the profits it is making? Instead of that every time if the government has to pump in money for these units, wherefrom the government will get that money? They will impose extra taxes and ultimately we will suffer.
    The same unit if it is given to you a private party/, It will get into profits? Where is the difference? In a private company, an individual is investing his money and he doesn't want to lose money, He takes account of everything and sees that where are the leaks and how to plug them?
    But in a PSU the top man also gets his salary and perks irrespective of the performance of the unit. So I am OK. Nobody bothers about the unit and its financial strength.
    I think this is the main reason which is making the government go for privatisation. So if anything wrong is being done that is by the administrators of PSUs but not the government. I don't see any wrong motive in the privatisation of these units.

    drrao
    always confident

  • #723174
    We need not blame the employees. But the employer that is Managing Director of the company who has been given the full powers to ensure that the unit will get into profits and get back the money invested. But they themselves are at fault. They tale care of their selfish goals? They never bother about the organisation. Corruption will be very high at the top level. That will make the unit sick.
    The government has to do many other things. Not just running some organisations. They have to take care of the administration, education and health care of the people of the country. If we start blaming the government for everything. no government will be efficient.
    As an income taxpayer in the country, I want my hard-earned money to be utilised for a good cause but not for taking care of the expenses of sick units in the country. I wholeheartedly support privatisation.

    drrao
    always confident

  • #723175
    #723173, There are innumerable examples where PSUs flourished and private sectors also flourished. Bharat Petroleum Corporation Ltd., Navaratna companies, LIC, ONGC, ISRO, CSIR, and several public sector banks flourished under government maintenance. If a government-run organization fails according to your hypothesis, why these organizations raked high in their success? So it is not the private sector or public sector that decides the success rate. It is the duty of the government to maintain the organizations in a disciplined way.

  • #723179
    As per the former RBI governor "Revenue per employee and cost per employee between government banks and private banks imply that net revenue per employee of private banks is 50% higher compared to government banks." Public banks have more regulations and circulars than the private banks that's why private banks are more result-oriented, service-oriented, and generate more profit, hence are better run. Yes bank, Lakshmi Vilas Banks and some other banks failed despite of private because they couldn't raise their capital. To raise the capital, it is necessary to properly run the organisation, so that prices in stock market will keep growing and it can be done whenever there is a requirement to raise capital. Private banks are disciplined by the stock market. But public sector banks are not punished by share market even if they are non-performing or performing poorly. We can also see the 90% bank frauds are in public banks. Because of continuous capital loss, these public entities will have to lend from government and they still are non-performing and loss making. The solution lies only in the privatisation.

    Government need to privatise these non-performing units and can keep only few as high performing assets. If the power will be with the private market players there will be lots of competition hence better efficiency and will also reduce the dependency of public sector entities on the Government. Definitely there will be an adequate control over the private market players.

  • #723180
    #723175
    Whether it is a private sector or government sector the government should maintain the organisation in a disciplined way. I don't think the government is going to privatise ISRO or CSIR or ONGC and profit-making banks I suppose. They are trying to privatise the loss-making units only to the private sector. If the profit-making organisations in the private sector are also governed by the rules and regulations of the same government, why these units fail to make a profit. That depends on the people who sit at the helm of the affairs and manage the company. They should feel that they are the owners of the company and see that that will run under profits. That is where the problem lies, I feel. The question is when some units under the same government are running well why not the others?
    I have seen ISRO working? its work culture is excellent? I have seen some other government units where the work culture is just opposite to that of ISRO. Who is responsible for this? I don't think the government is not responsible.

    drrao
    always confident

  • #723183
    Privatization of the PSUs has two aspects. One from the perspective of the employees and the second for the country's economy. As for the country's economy is concerned, privatisation helps it and gives a forward push. After all, privately run companies are more efficiently managed with better productivity compared to the government-run. Will get to this point in detail later. However, from the point of view of the existing employees, privatization is no good. Even though in my previous response I have mentioned salary cuts and other reduction in perks in our company, the take-home money that every employee gets is still quite handsome, especially when compared to the private sector. Maybe you may not believe, even an ordinary sweeper who is in the permanent roll of our company, with 25 to 30 years of service, comes under the 30% tax bracket. It is simply unimaginable in the private sector, right? Now, if our company gets privatized, (disinvestment is already on the cards for our company), wonder if the new owner will continue to pay us the hefty salaries that we are used to. Do not know whether you all know or not, much of the expenses for a PSU is on paying salaries to its employees. Another factor that makes salary a big burden for a PSU is excess manpower. Most PSUs, including ours, have excess manpower, which brings down the efficiency of running these PSUs further. Therefore, a PSU employee has to fear two things, if his/her company is privatised - reduction in salary or the loss of job itself. That is why no one who works in a PSU, in his/her sane mind would welcome these privatisation drives by the government. As such, my mind too would like to say no to privatisation, after all, it will be a question of earning my livelihood for me and why would I like to risk it by going for privatisation. But then you know friends, mind and heart are not always in sync with each other. In my next response, will let you know what my heart desires.
    Patience and perseverance pays

  • #723185
    Well Dr Rao, it is not fair to compare ISRO or CSIR with a public sector undertaking like BHEL, Coal India, ONGC, etc. They are entirely two different entities. The first two are government organisations that are entirely run by the government. They are not undertakings. They are meant for research and upbuilding of capability in the field of science and research. Whereas, the PSUs are meant for building the industrial strength of the country and to create employment for the people. The PSUs are meant to earn a profit. So the comparison of ISRO or CSIR with ONGC does not stand good. However, if you still insist on comparing the work culture of ISRO with others, I will say that it stands nowhere compared to private organisations. ISRO or CSIR are great organisations, no doubt about that, still the work culture there is too slack when compared to some of the best privately managed businesses.
    Patience and perseverance pays

  • #723189
    Dhruv,
    I am trying to compare a PSU with another PSU. There are lots of differences between the work culture of private organisations and PSUs. A Private sector company will have no mercy on an erring employee. They keep them on their knees and see that 100% work output will be there. Can any PSU do this? A small action on an employee in PSU can even lead to stoppage of production. It is not even noticed if the same thing happens to an employee in a private sector employee. In PSU every one is having their own rights but no responsibilities.
    If any CM or PM tries to bring in discipline in the government systems, these employees will never cooperate with the government and they work against that government. So what is the solution for this? Where the change is required.?

    drrao
    always confident

  • #723198
    In my earlier response, I have mentioned the cost of products or services offered by private organizations is much higher compared to that of PSUs. I have given examples of private hospital/nursing homes and mobile telephone service. Now if we compare the monthly average balance of private banks and the public sector banks it will be found that to maintain an account with a private bank one has to shell out more. The question is how many of our countrymen can afford that. It is true that the expenditure of the government towards paying the salaries of PSUs are huge which can be reduced by restructuring the workforce but it is also to be seen whether a large section of the population can afford the services offered by private companies. On one hand, there are many PSUs that are unable to make profits and becoming a burden to the government and on the other hand, new investments must be there to generate more employment. The government has to infuse capital to encourage investment and may be planning to generate the required funds through disinvestment. This goal seems to be short-termed which will not help the economy in the long run. If the government loses its control over the industries by privatising most of the units the private entities can easily create pressure on the government according to their own interest. Business entities the world over have a say on the policies of the government in the respective countries and they do it to safeguard their own interest. A robust economy where the people have enough monetary power can withstand that but in India, the time has not come yet for that.
    Sankalan

    "Life is easier when you enjoy what you do"

  • #723208
    Some members who are talking pro to privatization , saying number of jobs will increase. But the privatized sick PSU will have the same strength as that of original unit. If little expansion occurs over the time there may be little increase in the number of jobs. So simply one can not think by simply privatizing PSUs job avenues increase is not true.
    #723179, Many frauds occurred even in private banks like Sahara Bank, Chanda Kocchar related ICICI Bank fraud, Yes Bank loans fraud, etc. Private banks also have loan frauds and scams as in public sector banks. I am not able to understand certain sentences in this response-public sector banks are not punished by share markets. Private banks are disciplined by stock market.

  • #723211
    Mr.Sun , Elected democratic governments will have to see the welfare of public. If all public services are privatized, private organizations squeeze as much as possible from the customers. If we compare the State transport service cost and private bus charges we can know how much difference between them. Only rich can afford such services but not poor. If we see the cost of services provided by government run public trains and private run metro trains one can see the differences between these services. So elected governments role is to provide more facilities for common man at a reasonable rate. Private organizations try to maximize their profits but not work for the welfare of people.

  • #723213
    #723208
    I have tried to explain in my post that PSUs despite non-performing are not affected by share market due to involvement of government however, they are failed to raise capital.
    Further, banking frauds are everywhere even in the private sector but very less. where there are more than 90% of scams are in public banks only 8-9 % scams in private banks.

    #723211
    Nobody can say that services offered by private-run metro trains are costlier and out of the reach of the general public. Private run metro offers a neat, clean, hygienic and comfortable journey at a very reasonable cost.

    Let's take an other example of telecom companies, in the market now most of the telecom companies are privately run. If you say that Airtel, Vodafone are costly but Jio is offering cheaper services. There are lots of competition and these companies revise their plans and offer cheaper services to their customers. On the other hand, despite cheaper BSNL (a PSU) is out of the competition because of poor services.

    Private organizations try to maximize their profits but not work for the welfare of people. But in the case of non-performing PSUs, when they are non-performing and not able to raise capital and depends on government for funds then what they will do for the public.

  • #723220
    I am very sure that privatisation will bring the needed efficiency in the system and will help our country to grow in a faster pace. As regards the problem of employment that has to be managed in the new scenario where employment will be mainly generated by increased manufacturing activities and new areas of employment that generally accompany a privatisation drive. Another important thing is that when a person gets a job in Govt or a PSU he becomes a king of sort and whether does work more or less efficiently, gets his salary and all the facilities except, may be, getting less promotions in his career than with respect to his much efficient colleagues but who bothers for that when all other financial facilities are same. So, the point is that people become lazy and indifferent in a Govt or PSU set up and their performance is generally mediocre and if someone comes with new zeal and momentum others will push him to the back. On the other hand in private organisations people have to keep themselves abreast of the latest if they have to be successful in the competitive world that we are living in today. They do not have any other choice but they flourish because of those concerns.

    Another interesting thing which I perceive as the major setback in Govt and PSU system is that if some new thing comes in the industry or market then in spite of giving training and exposure the PSU employees will be having reluctance to adopt it and will force the management to go for outsourcing and when the management goes for outsourcing then they will go on strike telling that their jobs are being snatched. So PSUs are suffering from that big problem and in fact these are the cumulative reasons as why Govt is forced to adopt to privatisation in a big way. The system in China is based on communism and it would not be adequate to compare them here but one thing that we have to agree is that the Chinese public is mostly engaged in self employment as they have a huge population and there are very less Govt jobs. The GDP of that country is very high not because of PSUs or things like that but the environment in which one has to be competitive.

    Privatisation coupled with improved governance in the Govt is the only way to progress ahead otherwise we would remain a lagging and backward economy and will not be able to compete in the world markets.

    Knowledge is power.

  • #723234
    Jobs may increase indirectly, if not directly. More output will come. Proportionately, there will be an increase in inputs. So some industries where the inputs are made will flourish. This will be a chain effect.
    If a PSU is sick, the industries which are dependent on those industries will suffer a lot Many of them may be from the private sector. They may suffer a closure also. A sick industry will results in many losses directly and indirectly. Reviving a sick industry in the public sector is very difficult. The only way is to go for privatisation.
    So I am for Privatisation of PSUs running under loss or which are going some signs of losses.

    drrao
    always confident

  • #723235
    The management of the private sectors keeps eyes on numerous parameters such productivity of the units, minimum man power to operate the same, uninterrupted production despite the flucutuation of strengths of manpower during festival days and a meaningful dialogue of the management to the shop floor workers in raising the production of the units. They have the appraisal system to identify the top performers capable of enhancing the production to a new height. They have the different to system of awarding bonus of their employee according to their efficiencies. They keep a track of the areas which can lessen their production and these are plugged accordingly. The present era demands such culture to flourish. Hence we should go in privatisation.

  • #723245
    If Government is planning for selling of PSUs stakes fully or partially it will be beneficial only as I have already told in my earlier posts, Privatization will lead the improved efficiency, increased productivity and competitiveness. Quality will be improved by new improved management. Better products and betters services will be provided to the people. Right now in PSUs there is lot of political interference which affect their performance and it will be reduced after privatisation as decision will be free from any political interference. Privatisation will help the non-profit making PSUs to come out from the loss and even the profit making PSUs will be modernised and diversified their business. Their work culture will also be improved.

  • #723249
    Dr Rao ISRO, CSIR, DRDO and similar other organisations are not PSUs. They are government organisations. Anyway, in my last response, I had mentioned that the heart and mind are not always in sync with each other. The same is true here too. As a PSU employee, my mind does not want to go for privatisation. With privatisation there is a great risk of my salary being reduced or worse, I may lose my job. But then, when you see how bad things are around you; how as a PSU we are wasting precious national resources; how less we work; how less we are accountable; it pains you to the core of your heart. Umesh has rightly pointed out that every employee, especially the workers, in a PSU feels like he is a king. In our company, we have two kinds of workers with us. One is the permanent employee with all the benefits and perks and the other is the contract worker who is hired by our company at very low pay. The actual work or you can say most of the work is done by the contract workers. The regular employee at the most supervises them or simply whales away his time during the working hours. There would not have been any need of hiring the contract workers had the regular workers worked sincerely and thus saved our organisation some money, however small it may be. It is not only the workers who while away their time during the duty hours. The same is true about many supervisors and engineers too. With orders being low and less work to attend, the supervisors and engineers too have it very easy. It is not to say that every engineer, supervisor or worker is guilty of neglecting their work. There are some in every grade who are sincere and give their most to the company, but their numbers are very few.

    Some of you may ask why the supervisors and engineers are not able to get the work done by the regular workers. Here I will like to point out that the union culture is very strong in PSUs. As I previously mentioned, they are the real kings in a PSU. You cannot simply force a worker to work against his/her wish. You as a supervisor or engineer will be landing in trouble from the workers union if you insist on trying such a venture. With such a work culture around it is natural that the efficiency will be less and the productivity down. How in such a scenario can we hope for earning a decent profit?

    Patience and perseverance pays

  • #723255
    To Sankalan Bhattacharya and others who are not in favour of privatisation, I will like to say that I agree that privatisation is not the panacea for all ills that are ailing the public sector. But to say that cost of services and goods get increased due to privatisation is not always correct. I can agree with the analogy given by him in respect of hospitals, where the treatment costs at private hospitals are huge compared to government hospitals. But then you have to see that government hospitals are very much subsidised by the government. The same is not true for private hospitals. They do not have any subsidies or grants from the government. Moreover, private hospitals provide many specialised services and treatment that are simply not possible at a government facility. Otherwise, why should people rush to private hospitals for treatments in spite of having to shell such a large amount when they could have got all that done at a government hospital almost for free? That they are ready to pay for the services because they get value for their money at a private hospital. However readers, please note that it is not to say that I favour the setting of private hospitals instead of government ones. I favour the other way round. I mean to say that the government should set up more and more hospitals. Instead of being in the business of running a business organisation, they should be more into setting up hospitals, schools, colleges, building roads, bridges, in fact, every kind of infrastructure that can be a catalyst in the growth of the economy and businesses to thrive. Instead of wasting taxpayers money in failed business ventures like PSUs, the government should put that money into establishing hospitals and schools so that more and more people, especially the poor can avail of cheaper medical treatment and schooling. It is correct of the government to turn its focus into infrastructure development rather than wasting precious resources in keeping the monoliths (read PSUs) alive.

    Now coming to the cost point of view, I will like to explain a few things about the pricing of goods and services that are offered by our company. I have already mentioned in a previous response that we have excess manpower. Add to that efficiency of our workforce is less. It takes us more time to produce a good than what would have been ideal. Our overhead costs are also very high because we have a huge infrastructure (every PSU has) to maintain. All these results in our products being produced at a higher cost. As a result, our goods are less competitive than those being produced by private companies or the Chinese. That is one of the prime reason our company is losing business. We are simply not competitive enough compared to private companies or the Chinese. Previously, we could manage huge profits, because there was no competition then. There weren't the private companies or the Chinese who could offer the goods that we produce. So we had a monopoly and it didn't matter whether we were efficient or not, after all, all the business belonged to us and our customers had no choices despite our inefficiency. So Sankalan you can see, even though we are a government company, the cost of our goods are higher compared to those offered by the private/Chinese companies.

    Patience and perseverance pays

  • #723267
    Dhruv @#723255, I am not against privatisation of sick PSUs which I have already mentioned in my earlier responses but I am against the policy of privatising most of the PSUs irrespective of whether they are making profits or not. For example, lets' think of Indian Railways. The government is planning to make it privatised although it's making profits. In that case, the private train operators can fix the fares according to their wish and there will be no control over it. We all know that private firms are focused on making profits and of course they should be but it is also to be seen whether a majority of the countrymen can afford it or not.

    My contention is if the cost of services/products offered by the private companies is much higher can a majority of our population be able to afford it? The government constitutes Pay Commissions regularly to increase the salaries of the government employees but till now there is no rule in our country that specifies a fixed amount that has to be compulsorily paid to every employee of the private organizations irrespective of their work. In government jobs, there are Group D employees and there is no such thing in a private organization. Now think of the salaries of such types (Group D) of employees in a private organization and compare it to that of the salary of the managers or other officials in that organization. Is it comparable in any way? There are no specific minimum wages for labours in our country and it varies from state to state. The government is planning to make even the profit-making PSUs privatised although they couldn't fix how much money is required for any employee to maintain a decent lifestyle. Many are saying that privatisation is going to create a lot of jobs though I couldn't find how they will do it. Can the government specify what will be the minimum wage that must be paid to the employees by such organizations? If many employees are paid a meagre salary how they can afford other things? The economy has to be balanced. If there is no balance, the rich will get richer and the poor will become poorer and corruption will be unmanageable.

    Sankalan

    "Life is easier when you enjoy what you do"

  • #723268
    Govt is supposed to do certain jobs only like administration, police, defence, and judiciary. Govt or PSU need not to manufacture shoes or cars or grinder mixers. These are to be done in a professional manner by the private entrepreneurs depending upon the demand and supply conditions in the market. Private businesses are the backbone of the economy and are crucial for the growth. Only thing is Govt has to monitor and should have strict control over them. A good governance coupled with private entrepreneurship can do miracles for a country and India is no exception.

    I do not have any apprehension about the success of privatisation once it is fully implemented. I have only apprehensions about the Govt governance which is yet to come to a satisfactory level and give chance to growth of honest and enterprising industries. Different systems have their own pros and cons but primary thing is the clean and honest environment created by a good Govt governance.

    Knowledge is power.

  • #723272
    In the budget Govt. can not take any specific move to satisfy only one individual , by taking overall decision the govt. can give the benefits to them. Govt providing free treatments in govt hospital and also proving free treatments in private specialised hospital , for controlling the cost of essentials , govt. controlling the prices of input uses for producing the essentials in on hand and subsidy for essentials if required in other hands. In case of Sick Industry Survival scheme has already been submitted by the concerned Industry and it is in the hands of Govt. where it must be included that Steps taken like product mix and variation, outsourcing activities, amalgamation etc. to reduced cost and market strategy so that there is margin. Other side the govt also get the picture of all department and their Industries where is the surplus after dividend and subsidy adjustment.Then govt decides inter transfer of fund in between according to bye laws. So Govt is taking decision based on the report of their respective representatives where Minister/Chief Secretary is the Controlling authority. Privatisation is not the solution, govt has to maintain all existing subsidy scheme and if demands by situation that should be additionally taken care off in a Country like us otherwise you will not select them for next 5 years. So govt is somehow maintaining his family like India. Besides the Core Public service, Safety service of the Country and Industries which has been taken over by the Govt from Pvt. Owners, others Industries may be privatised but who will take this heavy responsibilities? you? or Govt.? I do not think so. Moreover outsourcing activities are there in almost every PSUs. Many Jobs which were previously done departmentally are doing through Contractual with very lower cost resulting more indirect employments. Various discussions held under the GD. The topic is so sensitive that live with every heart. Thanks.
    Believe in the existence of God the super power.

  • #723274
    Many are arguing private players give more satisfaction in their services but what about the cost of these services? Only rich can afford but poor will suffer. When government possessing PSUs with large assets and running with profits why should they forego such assets in the name of privatization. Is there any loophole in such thought of present government. Previously BSNL is one of the most profitable organization under government. But due to its mishandling of this organization at higher levels allowed private players to suppress this organization. There are certain fields where private players can be encouraged like tourism, entertainment , automobiles , hotel, personal services etc. These categories will offer lot of job opportunities to unemployed.

  • #723275
    I also support the views given in the post #723255 about hospitals and same is the case with the education system. No doubt, Government schools provide cheaper education but still they are vacant. People are not interested to send their children in government schools. Take the example of Uttarakhand. In hilly areas most of the schools are vacant and almost every other year Government merge two or more schools due to availability of very less students. And the same is the situation with the plains also. Everybody want to send their children in private schools. Why? because of the quality education and facilities offered by them. Further, a government employee fulfill their duty only. They have nothing to do with the success or failure of the organisation. While in the case of a private organisation, work of a private employee is target based and result oriented. Every private employee makes efforts for the success of their company to keep their jobs continue. If the organisation will run successfully their job will run and they will get their salaries. While in case of the PSUs even if the organisation is failing, nothing is affected as the employees are permanent. Where does the funds come from? From Government only. That's why non-performing and loss making PSUs are only a burden on government and must be privatised.

    Privatisation of PSUs will give government money which can be invested in the infrastructure development, education sector, Research & Development, and health sector etc. We can see that several PSUs like Air India, BSNL have consumed government money (which is collected from the tax payers like us) but returned nothing. In the past there are several examples of privatised PSUs who performed well like Maruti, Hindustan Zinc, VSNL, IPCL which indicates the success of government in PSUs privatisation.

  • #723276
    Whether privatisation will create more jobs or not is debatable. However, creating more jobs is not the only motto of privatisation. Privatisation also helps in preventing wastage of precious national resources, the taxpayers' money and moreover, why to create a privileged lot of PSU employees who are more of a burden to the company than being real assets. Agreed, years back, during the 1950s and 60s when the PSUs were first established, there was a requirement of such companies. At that time the government only had the resources and funds to establish industries. Also, there was an urgent need for employment then. With very few resources in private hands, privatisation would not have much meaning then. The PSUs then did a good job of creating wealth for the country and providing employment opportunities to the educated youth. But things are a lot different now. There are these days many high worth individuals and corporate families who have large funds to invest. Today's generation too is better trained to run businesses. The start-up culture has taken a strong root in the country. So instead of managing businesses, the government should now leave ground to the private players and instead focus more on creating a better environment for start-ups to bloom and businesses to grow. This way the taxpayers' money is better utilised for building infrastructure for the country's further growth.

    To Ramakrishna Kambhampati, who has mentioned that privatisation will result in costlier bus services, I will like to give the example of the bus services in Kolkata. The bus services there are almost entirely managed by private bus operators. And anyone, who has been to Kolkata, will realize how cheap the bus services are there compared to other cities, where such services are maintained by the government. In Hyderabad, my current location, the bus services are very costly even though managed by the state government. So to say that privatisation results in more cost is not always true. In fact, most of the time privatisation leads to increased competition among the different players and that in turn results in cheaper goods and services. The same is true for the airline industry. Before privatisation, Air India had the monopoly and the airfare then was beyond the reach of ordinary people. Now with privatisation, almost everyone can take to the sky. At times, airfares are cheaper than train fare.

    As for the railways, it won't be easy for the government to privatise it in one go. As such, things are being done in piecemeal. Some of the non-critical services like catering, station maintenance, etc. are being thrown to the private sector. A few private trains too have been launched. But it will be a long while before the government could think of privatising the entire railways. And what the harm in privatising some of the services, if it can earn good revenue to the railways and the taxpayer too is spared of some of the taxes. Agreed the private trains are not affordable for the poor. But there is a market for such trains, as those who can afford can at least travel in them and thus earning some revenue for the railways. Such high paying passengers would have otherwise shifted to travel by air. Moreover, right now the railways is not running in profit. Its income is in deficit this year.

    Then there is another myth that units that are running on profit should not be privatised. Why not and what harm in privatising such ventures? Privatising a profit-making enterprise will only fetch good returns to the country. Whereas, there will be few takers for loss-making or sick units. For example, Air India, which is deep in red, has no takers even at rock bottom prices. So it is a loss-loss situation for the government with respect to Air India. Holding it means further losses and while trying to sell you have to sell it dirt cheap. So it makes sense to sell a PSU when it is still in profit and not to wait until it becomes a loss making unit.

    Patience and perseverance pays

  • #723279
    I will reiterate and close my part by mentioning that every system has its pros and cons and we have to see which is more beneficial to the country's progress and welfare and well being of the people. That is the main thing that we expect from the Govt policies. If we see the last 73 years after the independence then we would find that privatisation has been done in steps by various Govt to increase the efficiency and performance in our work. Today we have not only to stay in business domestically but there are myriads of opportunity in the international market also and a timely effort and dedicated project can get us laurels of all kinds. The recent example of demand of our country's vaccine in the international market is a live example of efficient and aggressive business working. Countries like China are already taking advantage of their huge manpower and efficient working. Japan is another example where perfect six sigma working is an example for the rest of the world. We have a large manpower and instead of making a large number of while collar managers in some Govt or PSU where they would be doing only a limited work fetching then a fat salary, it would be prudent to privatise many areas which are suffocating under these PSUs and once they are given to the private sector they will flourish in an unprecedented way and generate a lot of employment. When industries flourish, huge employments are generated. Govt cannot generate employment by just adding people to its already overstaffed departments. Given a choice everyone will like to join a Govt job but it is a costly proposition for the country. Let us privatise in a big way and progress ahead not only in our country but emerge as a leading one in the world.
    Knowledge is power.

  • #723282
    I am in favor of a mixed economy. I want both the public sector and private sector to exist. Mr. Vajpayee once said that "unbridled privatization is a recipe for social disaster." The present Government intention of completely privatize the public sector is not good on many counts.
    1. The public sector provides more jobs than the private sector. Private sector goes for more automatization and lesser employees. This will result in lesser jobs. In a country like India with more than 130 crores of population, creation of jobs is more important. Complete privatization is suitable for countries which are rich and have lesser population.
    2. The public sector will have a social angle whereas for private sector it will be nothing but profits.
    3. The private sector is the culprit in almost all the non-performing assets of the banks.
    4. Some disinvestment made by the Government gives an impression that the private players are shown favors. The Hindustan Zinc Plant was sold to Vedanta group at a lesser price. The Zinc plant was closed at a later stage and that company sold the lands in real estate making huge profits. The Government did not interfere. The private players eye the landed property of the units they are going to acquire and get it at a lesser price as at the actual price, they will not come forward to acquire that unit. Another case example is Vizag Steel Plant. It is having nearly 12000 acres of land. From what I gathered from certain debates on the TV., the resale value is set at less than Rs 5000/ crores. The land value at present is one lakh crores. It has developed assets of 2 lakh crores. The plant is running under loss from 2015 only and the main reason is that it is not having own iron ore mines. The successive governments failed to provide captive mines to it in spite of many requests by the plant.
    The cases of Rafael and the privatization of airports also casts doubts on the intentions of the government. Anil Ambani is selected by ignoring HAL. The Adani group is given maintenance of 6 airports even though the government appointed committee recommended that not more than 2 airports to any single company. Such of these aspects give raise to doubts about the government actions. The NITI Ayog also says the government wants to encourage four or five companies to develop them as giants.
    The Government is at fault if the public sector is running under losses. It should have taken necessary steps to put them on profit lines. There is a lot to say, but I close my arguments at this stage.

    " Be Good and Do Good "

  • #723283
    In this response, I will like to discuss why public sector undertakings are a misfit in today's fast paced world. There was a time when PSUs didn't have any competition to them. They simply ruled the market and profited heavily. But with growth in private companies and globalization, things are not the same anymore. These days to survive, a company has to be highly competitive. It is such a fast paced world that if you do not keep up with the times you are going to be left back. In any private sector you see, people who work there are highly competitive. Before joining my present PSU job I too have seen life in a private company for four years. I have seen how much hard you have to work there to keep your job intact. You have to be always on your toes and any slack on your part, you will be shown the door. But then there are various opportunities to grow in a private company. If you are ambitious enough you can rise up the ladder very easily. Whereas in the public sector, things move at their own slow pace. There is no fear of losing your job or salary. It does not matter whether you work hard or not, you are going to get your promotions in due time. No extra advantage if you are talented in a PSU. It is the same thing for everyone. There are even people who do not work at all, but are getting their salary and all the benefits that comes with the job. Now in such circumstances, how can one get motivated to do something extraordinary for the company. Neither your talent gets recognised, nor you get to do something that interests you. Naturally, the company suffers, loses competitiveness and thus results in losses for the company. Many people blame the top management for the failures of the PSUs. But they do not see the bureaucratic hurdles that every PSU has to face before they can run the company efficiently. Many efficient leaders and managers have tried their luck trying to bring these PSUs back to profit, but then they all have failed at the end. It is definitely not the best times for the PSUs. The mantra 'survival of the fittest', not only just applies to living beings, but to the corporate sector too.
    Patience and perseverance pays

  • #723284
    As above said by many members, privatisation will create a lot of job opportunities. It will also help in increasing the revenue of govt. It is not fully correct. I am not in favour of privatisation of PSUs. Everything has its pros and cons. What do you think if we privatise everything then people would be honest and hard working. People will remain the same they will search for another method to cheat the public. Today, if our PSUs are in huge loss then govt should implement hard and fast rule instead of privatising it. Once you look towards foreign countries like America, China, Japan etc are highly developed due to hard rule and regulation. There, govt always not hue and cry for privatising everything. If you hand over everything to the private company then what govt will do? Why we spent crore rupees on the election? There is no need for governance. Some private people will run our country.
    Our motto is to make an India developed country. We don't want to differentiate between the govt sector and the private sector. I want to say one thing, development is only possible by implementing hard law and order instead of privatising.

  • #723286
    Even the government also need not run a unit for charity. They can earn profits and use those profits for a social benefit like the government is asking private companies to spend some money on Social welfare under CSR. The government need not earn money from the PSUs but PSUs should sustain on their own. But every time they can't pump money for its survival.
    There are NPAs. The government should take actions and see that the NPAs will reduce. Similarly, some PSUs are at loss. The government has to decide and take action. Both are separate problems. Both should be solved separately. Thinking of NPAs if we stop promoting industries in the country where will be the progress for the country. So one should see the overall situation and take the corrective actions.
    By running PSUs inefficiently there are huge losses in natural resources and money also. If one can run the unit efficiently there will be an improvement in the overall system. I feel privatisation is welcome to save some. PSUs. Otherwise, they will get closed down permanently.

    drrao
    always confident

  • #723288
    How would it be if the participants bring in points like BSNL running into loss after the advent of JIO and the temporary ban on Maggie noodles in between and connect it to the main topic. Let us be on the same grid but just to bring in some additional points.
    'Mastering others is strength. Mastering yourself is true power'. -Lao Tzu

  • #723305
    As already I said in my earlier post #723213, that BSNL is now out of the competition due to poor services and people are going towards the private telecom services. But Jio and other telecom companies are solely not responsible for it. In fact, BSNL itself is more responsible for it. BSNL has surplus of employees. When other telecom companies have 25000-30000 employees, BSNL has more than 1,50,000 employees. When anybody face any issue in networking or any other service, it is nearly impossible to approach it while other companies provide solution very fast. Further, Jio has given a tough competition not only to BSNL but other telecom companies also by offering free services /very low cost services.

    The main reason behind the failure of BSNL is its old infrastructure and old aged staff with lethargic attitude. However, from some time BSNL is trying to get into line with other companies but it is not able to overcome because of the high debt on it. And loss made by it is much higher than the profit gain. That's why government didn't allow it for further loan from banks. But it will be privatised, in that case the scenario will be changed.

    But privatisation of any loss making unit is not an easy task because there are very less or probably no buyers as in case of Air India. And privatisation is a very time consuming process right from the evaluation to the final sell of the stake. Hence, if government is planning to sell its PSUs stake then it will take a long time and lots of strategies need to be developed. But ultimately it will be beneficial for the country.

  • #723306
    These days we can't avoid competition. We have to get ourselves updated in such a way that we are always the front runner. This vigour is not there in many PSUs. The company will run at its own pace irrespective of competition. Definitely, other people will beat them. There are many examples of that. When a customer complained about his BSNL phone to the department, the concerned officer advised him to cancel the connection. What impression the customer will get? I just mentioned that. All may not be like that. No PSU will improve the technology but continue in the same old technologies. Privatisation will give rebirth to the unit.
    drrao
    always confident

  • #723334
    If government take the option of complete privatization, every product and service become costlier and monopoly develops in every field. Those arguing for complete privation, can you say any service or product that become cheaper through privatization. So many are saying Jio overtaken all telecom companies and is providing cheap service to public. After initial discounts, Jio increased monthly mobile services to a higher rate. Because of monopoly this cost it may increase further. Due to this monopoly only all the other private telcom companies ran into losses. Some argued even though PSUs are privatized, government control will be there over them. It is not at all true. Once private players enter, government loose control over the unit and the private units work according to their wish. If the private players are Indians, individuals they amass the wealth and it won't turn into wealth of public as it is operated by government. If they are foreigners this wealth will benefit foreign countries. This logic no one bothering about and thinking about the meager tax the government get. Definitely the present government promoting crony capitalism due to which the business class and political class amass wealth but common man not get benefited.

  • #723341
    I completely agree with Dr Deepali and Dr Rao on their views about BSNL. What happened to BSNL is true for other PSUs as well. These PSUs, in the pre-privatisation days, used to earn huge profits because of the monopoly they enjoyed then. But their services were very costly and not up to the standard. Everyone who has used a BSNL connection knows pretty well how their services were. The same is true for our company too. With the advent of private companies, they simply could not match on the cost front as well as services. Naturally, most of them are in losses now. Ever since, a bit of restructuring was done in BSNL, things have improved a little, but it is not enough to pull them through.

    Well, I do not completely agree with KVRR where he has mentioned that the public sector provides more jobs compared to the private sector. It is in fact the other way round. As per one report, only 4% of the workforce in India works for the public sector (including govt jobs). The rest of the workforce is in the private sector (both organised and un-organised combined). Moreover, automation is being extensively done in PSUs too. The same is true for our company too. We have lots of CNC (Computer Numerical Control) machines at our factory that has helped in reducing the manpower. Thanks to the reduced labour, we have less of labour troubles. However, I agree that privatisation will result in further reduction in manpower and that's why I too am wary of the effects of privatisation in our company.

    Then you have said that privatisation is suitable only for rich countries. Well, it is suitable for everyone. In fact, it is the road to prosperity. It is the private companies that create most of the wealth for the country. We have all seen how the private sector in the west has brought prosperity there. We should have joined the bandwagon earlier, just like China, South Korea and many East Asian countries have done and reaped the benefits.

    To the point that only public sector companies look into social angles, it is not always true. There is not much social welfare being done by our company even though we are a Maharatna company. When survival is at stake, how can we think about taking care of others. Anyone who has been to Jamshedpur will realize how the Tatas have taken care of the city there. Even though it is a private company, it takes care of everything, including electricity, water supply, education and healthcare. The Tatas have created so many parks, lakes, zoo and other infrastructure that are availed by every one who resides in the city. To say that private companies only work for profit is not true for the Tatas and many other such private companies.

    Patience and perseverance pays

  • #723345
    I don't understand why privatisation will create a monopoly. If a private company comes into production and earns profits many others will also come into the line and there will be a big competition and the customer will have a choice and product quality will have a lot of say. There is no link between monopoly and privatisation.
    Many services become cheap after private players came into those fields. My residence lnad line phone bill used to come around Rs.3000/- for two months during 1990s where only BSNL was there. Now I am able to complete my mobile bill with Rs.500/- a month.
    I never accept that privatisation will not reduce the jobs. As explained in my earler posts, there is a chance you get more jobs indirectly if not directly.
    Expenditure will comedown and prodcut costs will come down. Corruptuon will reduce at least in these areas. The customer will pay the real value of the product but not the escalalted cost.
    I am of the firm opinion that privatisation gives more time to the government to concentrate on other important matters like health, education and administration.
    I am in full support of privatisation of sick PSUs and inject life into these units so that they survive long in the service of the nation.

    drrao
    always confident

  • #723348
    #723345, If more private players in action, the services become cheaper. If it is the case, why private hospitals, private educational institutions, private travel busses become costlier. Time to time more private organizers entering into these fields but cost always escalating time to time. Why?

  • #723349
    Well, in the end, I will like to say that even though privatisation is desired, it won't be possible to privatise every PSU in one go. It is especially true for the big PSUs, for example, BHEL. It is so huge that it will be difficult for one corporate group to buy it alone. Finding buyers will be difficult, especially for the loss making companies, which have seen their market shrinking? The same we have seen in the case of Air India, which did not find any buyers even after repeated attempts. 'One size fits all' approach won't work for every PSU. It is also not very clear whether the government wants to go for an outright sale of the companies or will just disinvest a part of the shares only. Privatisation will have its pros and cons. On one hand, efficiency, productivity and profitability will increase helping in wealth creation for the country. On the other hand, there will be a few job losses and possibly, reduction in salaries. The green spaces and the vast amounts of land that are the features of most PSUs too may get affected. After all, a private player, to cut down its expenses on overheads is most likely to dispose them off. Yes, privatisation is no panacea for all ills ailing the public sector, but it still is the need of the hour, to help the country grow into a true economic power.
    Patience and perseverance pays

  • #723350
    I think term monopoly is more appropriate for PSUs. Earlier PSUs has a monopoly in their sectors. On the commencement of private market players, the competition was created and then due to less efficiency and poor management they left behind. We can see the case of public sector transport. Most of the public sector transport are having very old infrastructure while private sector transport is running new vehicles with advanced features and modern facilities. That's way people are going for it. In other sectors also most of the PSUs are not doing well.
    In the field of environmental and social, private sector are also doing a good job. Government can enforce private sectors for strict implementation of social and environmental responsibilities very well as compare to PSUs by regular monitoring. Under corporate social responsibility, private sectors can do a wonderful job by social reform of society.

    I support privatization due to the following reasons:
    1. PSUs are nurtured by Government like babies and whenever they go in loss are bailed out by the government. This means ultimately every load is beard by the Government. Every time support by the government motivate them to doing nothing. And they have no worry about any loss.
    2. In some PSUs, working approach is also not very positive.
    3. Accountability of performance is also not there in PSUs. They are not responsible for any loss.
    4. Poor management and lethargic attitude of employees in PSUs.
    5. Over expenditure on unnecessary things in PSUs

    Several PSUs like BSNL, Air India are making loss and proving them as highly inefficient. If government will try to restructure them still it will take a long time and extra efforts and further there will be no guarantee that these loss making unit will be productive and make profit again. So it is better to get privatized them and handover to the private efficient management which will work and revive them. With these points I conclude my GD.

  • #723351
    Privatisation will be fruitful in case of loss-making PSUs and it is surely a revival plan for such PSUs but when it becomes the policy of a government to privatise PSUs then the target of the government remains to privatise them one after another. Private companies must come up and invest in new ventures which are essential to generate more jobs but it also has to be seen that it impacts the economy in a positive way.

    Think about Reliance and the areas in which they have ventured. In almost every area you will notice their presence. In the name of AtmaNirbhar Bharat (self-reliant India), a handful of companies are becoming self-reliant and the small players are struggling. Can the government make some rules that certain big firms will not venture out in specific areas to protect the small businesses? Here crony capitalism plays a big role in the favour of a handful of organizations. You will find only a few big names, that many members have already mentioned earlier, in certain sectors and to create a monopoly for them other players are harassed so that they can move out. The same case is with the BSNL. Many have opined that it is because of the fault of BSNL but who is managing BSNL? To make way for the private players the government never thought of restructuring them and anybody can understand the after-effects.

    Only a handful of PSUs are privatised till now and there is not enough data to suggest whether it is a good option for the economy. While the government in a poor country like India has enough responsibility towards the people, it has to make calculative decisions so that the economy flourishes. There must be competition and enough private players in the field but it should not be such that a few private players will control the policies and functioning of the government. Rather than doing good, it will increase corruption at every level. Therefore, I would like to conclude by saying privatisation should be the revival option for the sick PSUs but should not be a policy of any government in an imbalanced economy like ours.

    Sankalan

    "Life is easier when you enjoy what you do"

  • #723353
    @ 723348, As I had previously mentioned hospitals and schools are one thing where the focus of the government should lie. Instead of trying to run businesses, which it is not efficient at, the government should help in building infrastructure for schools and hospitals. Had the govt opened a good number of schools and hospitals, the private sector would not have found an opportunity to enter such fields. Private hospitals and schools are costly because of the demand-supply gap. The demand for schools and hospitals is more compared to their supply. Every one of you knows how hard it is to get admission to a good school. On the other hand, whatever govt schools and hospitals are there, their standard is so low that even those from economically weaker sections also shy away from availing their services. When it comes to government jobs, things are just the opposite as everyone wants a govt job. If only the government would take the pain and increase the number of such schools/hospitals and improve their services, automatically people will flock to them and in turn, the costs would also fall.
    Patience and perseverance pays

  • #723354
    Sankalan, there is no fun in selling a sick PSU, as it has to be sold dirt cheap then. Only when you sell them when they are still making some profit that you can get some decent money from the proceedings. The idea is why to waste taxpayers money in keeping such PSUs on ventilator mode when the money could be better utilised in establishing welfare measures by the government. As for corruption is concerned, it is more in the government sector rather than in the private sector. Reliance Industries might not be like the Tatas, but they have anyway helped in creating wealth for the country and at the same time provided employment and earning opportunities to lakhs or perhaps millions of Indians. Thanks, everyone, for the interesting discussion. Concluding here.
    Patience and perseverance pays


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