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  • Category: Miscellaneous

    How about leasing Public Sector Undertakings?

    The public sector undertakings (PSU) were set up with a view to speeding up the growth of core sector industries necessary for the economy and the strategic equipment needs of the country. The Government allotted land and financed the projects. They serve the purpose of providing employment and overall development of the neighboring areas where they were set up and also generate income for the government. The successive governments failed to make many of them a success due to their lethargic attitude.

    The present government says that all the PSUs will be sold irrespective of whether they are making a profit or loss. They want to privatize all the PSUs. The money belongs to the people. The land belongs to the people. Ours is a socialist country but not a capitalist country. The land is very costly. The government wants to sell all these units to private players. From what we have seen and what will happen in the future, the private players get these properties very cheap. From some debates on the TV, I gathered that the Vizag Steel Plant is valued at a very low rate of Rs 35000 crores. This is subject to correction. This plant is having more than 12000 acres which at present rates may fetch about 5 crores per acre. About ten years back, Hindustan Zinc Factory at Visakhapatnam was sold to Vedanta Group. After running it for some time, they closed the factory and sold the land for a huge profit. In many of the PSUs, the private players will be more interested in the land.

    This should not happen. If the government is unable to manage them, let them lease the units to the private sector. The government will be saved the trouble of looking after these units and gets revenue. The properties that belong to the people of the country remain with the people only.
  • #726319
    Very good suggession from the author as the lands and properties belonging to sick public sector units can be put to better use and also the the facilities of PSU's for long lease would be good offer. There are many companies which want to establish their factories and not having lands. The PSU's need not sell their land but lease them for a formidable amount to get rid of their debt traps and giving away the future salaries. For example ECIL in Hyderabad has good factory but not used to the hilt. It is in the proximity to electronic complex where many Industries want to establish but no land.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #726320
    Mohanji, you have completely misunderstood me. My point is instead of selling the PSUs, the same can be given on lease to run those units. The units remain with the government that is public. Revenue will also be generated through the lease amount that the government gets.
    " Be Good and Do Good "

  • #726330
    Former central governments have started public sector industries and service providers with great foresight. Various public sector undertakings have been formulated and implemented by Prime Ministers from Jawaharlal Nehru, the first Prime Minister of post-independence India, to Atal Bihari Vajpayee at various times.
    But the current central government's policy is to take seeds for food. This is unacceptable.
    Some PSUs were initially sold under the name Sick Units. But the government has not given any second thought to how to cure their sickness before such a sale. They are said to have been abandoned because there is no difference between leasing for the long term and selling. The management making sick their PSUs for the private sector giants, who belong to the same category, each is made Sick by receiving money or better postings in advance from them. Like our BSNL. The BSNL may soon be written off to the Ambani group, a private sector telephone, and mobile service giant. It is in this way that the central government's love affair with such private-sector giants progresses. While the party receives many large amounts of money as donations from their various sectors, the government is working to increase their income by hundreds and thousands of times - without any other rival.
    But even PSUs that were once sick and are now making huge profits by making the necessary corrections and that are also selling now.
    A strong fight is needed against such measures.

    "Cheruthulli Peruvellam"
    small drops make a mighty ocean

  • #726332
    I am also of the same opinion that instead of keeping the factories and machineries idle, the same can be leased to other companies which can make products and losses mitigated.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #726333
    Mr. Wilson, what you expressed is correct. This government policy to sell all PSUs is absolutely wrong and I personally feel is that all this is being done to benefit the private players, that too a few. I heard that in the BSNL, a voluntary retirement option is going to be given for the second time and this time also many employees may accept it. This makes it easy for the private player. There is no 4G in BSNL so far when the other ISPs are going for 5G. . It seems it is intentional to make it a loss-making unit. Unfortunately, there are many people supporting the moves of the government. They are not inclined to understand the loss to the country.
    " Be Good and Do Good "

  • #726342
    That is a good proposition. The property belongs to the government only. They can lease out the unit so that the government will get some revenue in the form of lease rent. The lease period may be decided by the government and there can be a termination clause. But what happens to the staff who are on roles. The company which has taken the unit on lease should pay their salaries and they should be continued. Many companies feel that the staff is more in these PSUs. So the companies may not come forward to run the units on lease as their overheads will be more than their competitors. How to address this?
    always confident

  • #726348
    When a private organization can run an industrial unit in a profitable manner, why it cannot be run profitably as a public sector unit? It shows the inefficiency of the Government. It is for the government to make it a profit-making unit.
    " Be Good and Do Good "

  • #726450
    The unfortunate part is that we are against the privatisation but when we have to run the system under the Govt control like in a PSU or other Govt department, we utterly fail in making profits and progress. That is the one main reason why Govt is contemplating for the privatisation. The authors viewpoint that instead of selling them they can be leased so that the ownership remains with the Govt but operation and management goes under private control and methodology. In that case that will become profitable and their productivity will increase. I also think that that model may be better than simply selling them off.
    Thoughts exchanged is knowledge gained.

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