PSUshavealso playedan invaluable
role in the developmentof the coun-
try’sinfrastructure.Not onlydid they
addresstheentrepreneurialvoidin the
infrastructuresectorfollowingIndia’s
independence,buttheyalsocontrib-
utedimmenselyto India’spost-colonial
economictrajectoryand also pavedthe
way for the establishmentof sundry
otherenterprises.
Moreover,PSUshavebeeninstru-
mentalin the successof governmental
schemesaimedat improvingtranspor-
tation,roads,irrigationfacilities,public
healthand sanitation,medicalfacilities,
educationetc. Morethan60 per cent
of ‘CentralPublicSectorEnterprises’
(CPSES)continueto be activelyinvolved
in infrastructure-relatedservices.Pub-
lic SectorEnterpriseshavealso provided
the muchneededeconomicbackbone
to infrastructurespendingduringtimes
of crises,therebycheckingthe unem-
ploymentlevelsand providingfinancial
security.
For instance,in recentyears,the
NationalBankfor Agricultureand Rural
Development(NABARD)has beenaiding
the developmentof publicinfrastruc-
turein ruralareasthrougha dedi-
catedFundcalledRuralInfrastructure
DevelopmentFund(RIDF).RIDFprimarily
operatesby fundingStateGovern-
mentsfor takingup ruralinfrastructure
projects.Cumulativesanctionunderthe
facilitystandsat Rs 3,44,141croreas
on 31 March2019.It has resultedin ad-
ditionalirrigationpotentialof 330 lakh
ha. and additionalruralroadnetwork
of 4.68 lakhkms,interalia.In recent
times,NABARDhas also takenstepsto
supportGoI in findingsolutionsto vari-
ous problemsin ruralareassuchas lack
of irrigation,housingand sanitation.
A separateFundby the nameLong
TermIrrigationFund(LTIF)has also
beencreatedby NABARDfor the
completionof 99 mediumand major
irrigationprojects.Further,additional
irrigationpotentialof 81.37lakhha. is
estimatedto be createduponcomple-
tion of theseprojects.
Recently,it has also beenannounced
that LIC has offereda cumulativeRs.
1.25 trillionline of credit,overa period
of five years,to fundhighwayprojects
acrossthe country.At a timewhenIn-
dia’sinfrastructuredemandsare colos-
sal, LICs fundingwoulddefinitelyhelp
easethe burdenon the government.
Furthermore,the nationalinsurer
was secondonlyto the Tata group,in
the list of India’smostvaluedbrands
publishedby BrandFinance,a London-
basedindependentbusinessvaluation
and consultancyfirm.LIC movedup four
placeswitha 22.8 percentjumpin its
valuationto makeit to the secondspot.
ProfitablePSUshavealso helpedthe
stateovercomefiscaldeficitsthrough
theirrevenuesandhavebeeninstru-
mentalin helpingIndiaachieveits
budgetdeficitgoals.Theyalso help
rejuvenateunderperformingsectorsof
the economyby providinginvestment
opportunities.For instance,last year, 10
per centequitystakesin BHELand OIL
wereplannedto be sold to raise9,000
crores.
At present,withthe decreasein regu-
lations,theshareofthepublicsector
in India’sGrossDomesticProducthas
beenon the decline.Regardless,legacy
continuesto holdsway,inasmuchas,
as recentlyas 2018,four of the eight
Indianfirmsthat featuredin the Fortune
500 list wereIOCL,ONGC,SBI and BPCL.
As per anotherstudyconductedin 2017,
53 per centof the existingPSUshave
beenrecordingbetterprofitability,
as comparedto otherunitswithinthe
specificindustrytheybelongto.
However,PSUshavealso increasingly
encounteredconstraintsonseveral
frontsoverthe last decadeor so. Theseincludeallegationsoffraudulency,ac-
cusationsofbureaucraticbottlenecks,
and structuraland functionalimpedi-
ments.Complaintshavealso surfaced
regardingtheabsenceofa rigorous
appraisalsystem,the shortageof man-
powerand,mostrecently,the caseof
sick PSUswhichhavebeenconsistently
underperforming.However,withthe
governmentopeningup moreCPSEsfor
strategicparticipationbytheprivate
sector,publicspendingseemsto be
offeringmoreexcitingopportunitiesfor
revivingthe Indianeconomy.
Sincetheirinception,PublicSec-
tor Undertakingshaveplayeda crucial
role in India’seconomicdevelopment.
The growthof publicsectorenterprises
hasalsoconsistentlyhelpedpropel
the holisticgrowthof the country.
Although,the role and functionsof
theseundertakingshaveundergone
drastictransformationsin recentyears,
theycontinueto remainvitalplayersin
India’sevolvingmarket.In spiteof the
fact that severallimitationspertain-
ing to the sectorremainunaddressed,
India’snation-buildingexperience,
foregroundedby the adventof PSUs,
illustratesthat the macro-economy
could,in thepresentday,loseits
vitalitywithoutpublicsectorenter-
prises,whichhavethepowertoreduce
inequalitiesof incomeand wealth,bring
aboutgargantuansocialwelfarepro-
grammes,significantlyaugmentstate
revenue,andcreatestrong,sustainable
and plannedeconomicgrowthin the
country.- A MARKETING INITIATIVE•