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'Let's make PSUs lean, mean, and efficient,' says Sinha

Gurdip Singh in New Delhi

Finance Minister Yashwant Sinha today called for creating a ''lean, mean and efficient'' public sector which will be able to face ''the inevitable, oncoming'' competition from foreign and domestic companies.

Inaugurating a seminar on ''Public Sector in Transition'', Sinha said it was only by privatisation that autonomy could be achieved. ''The days of monopoly are over and it is high time that the PSUs are prepared for competition as the government will not allow a situation of economic control and dominance to remain. Creation of monopoly has meant that balance sheets in the public sector are no longer important.''

Describing lack of autonomy due to the control exercised by the bureaucrats as the bane of PSUs, Sinha said it was important to break this stranglehold which was stifling these enterprises and the potential of professional managers.

Sinha said the bail-out packages of some PSUs have been very costly and overstaffing was the other main problem of the PSUs.

Sinha said the government should create fresh PSUs out of the sale of its existing undertakings and then undertake fresh investments where the private sector is unable to enter. Thus, it would be a perennial phenomenon of the state selling enterprises and starting new ones.

Sinha said it was for the first time that in his budget he had used the word privatisation as governments have been hiding under the nomenclature of ''disinvestment''.

Privatisation would mean disinvestment of both sick as well as profitable public sector enterprises. It would also imply strategic sale of PSUs which meant that control would no longer be in government hands, he added.

Sinha said he was not among those who would stand up in Parliament and defend the public sector at any cost. He was also not among those who suggest that public sector units have no place in India. The future of the public sector lies somewhere in the grey area. The public sector has an important role but the role needs to be redefined, given the past experience and existing realities.

Opening up of the economy was inevitable and thus competition from abroad was a fact of life, he said.

The seminar was organised by the Alumni Association of NCE Bengal and Jadavpur University.

Sinha said there was so far no exit policy.

He said there was overstaffing in PSUs because politicians and bureaucrats considered it their birth right to get people employed in PSUs. This hampered efficiency.

He mentioned a case where in a public sector company, the number of people employed increased from 14,000 to 28,000 in one year. This was because all those who were temporarily employed were confirmed.

The finance minister said he had personal experience of how PSUs worked as he had been chairman of some of these and even served on the board of directors of several others.

Sinha gave examples of how populism make PSUs sick and bankrupt. He sarcastically remarked that he still took interest in a public sector undertakings he headed like the Delhi Transport Corporation.

Recently, the Delhi government made travel free for students in these buses even though they were paying Rs 12.50 per month for the purpose. Along with this, several other sections are also given concessions.

Sinha said he was of the confirmed opinion that subsidy should not be hidden. He said in case it was necessary to subsidise some sections through PSUs, then this should be offset separately. In case this was not so then the management takes the plea of not being answerable for performance.

Sinha further said revenue position of the government was looking up.

He said while revenue from indirect taxes during April to June had increased by 21 per cent, that from direct taxes rose by 13 per cent.

The finance minister said there would be no cross-holding to achieve the disinvestment target this fiscal.

Asked whether the revival package for the Steel Authority of India would go through, Sinha said the bail-out packages would be considered on a case-by-case basis.

The finance minister had referred in his speech to such a package which had cost the exchequer dear, to the extent that a Rs 250 million company had to be revived at a cost of Rs 11 billion.

The finance minister said he had not stated that there would be no revival cases but these would be examined on a case-by-case basis.

UNI

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