Have clarity on selling sick PSUs

Union finance minister Arun Jaitley’s statement about being open to selling loss-making public sector units has set off conjecture about the units he may have in mind. Some have suggested he start with Air India, BSNL and MTNL. Besides these three, the top 10 loss-making PSUs are between them in the red for Rs 4,551 crore and include companies like Fertiliser Corporation, Hindustan Fertiliser, Hindustan Photo Film Manufacturing, Hindustan Cables, Burn Standard, NTC, etc. One does not know how serious the government is about privatising them, and which PSUs it has identified for sale. Mr Jaitley’s logic is that they have been surviving on government support now totalling Rs 1.57 lakh crore and, since they are almost on the verge of closure, it is better to privatise them and save the jobs of a huge number of employees.

The Manmohan Singh government also had a list of sick units that it wanted to privatise and had invited NRIs to take them over. One recalls that there was a lot of enthusiasm,  but nothing seems to have materialised. There are several issues involved regarding sick PSUs. If one leaves out the big three — AI, MTNL and BSNL — it leaves PSUs like the ones mentioned above. It does not seem likely that there would be many takers for these PSUs together with their assets and liabilities. If this is so, then an option would be to offer the staff a generous voluntary retirement scheme (VRS), skill the younger ones and sell the assets or auction them to the highest bidder. The PSUs are supposed to have valuable real estate that can be monetised. But, of course, this would have to be done on a case-by-case basis with the future of the staff uppermost in the scheme of things.

Regarding former jewels like AI, MTNL and BSNL, it’s a different story. They were deliberately made sick for different reasons. AI’s case is well known. In the case of MTNL and BSNL, they have been left to the mercy of incompetent managements and can be brought back to health by honest, efficient people at the helm. It is a matter of deep concern that the new BJP minister, Ravi Shankar Prasad, has reportedly given additional charge as chairman and managing directors to the people at the helm of these two prestigious institutions, even knowing their record. If this is true, then Mr Prasad’s actions seem to be at variance with the pronouncements of his boss, Prime Minister Narendra Modi, whose buzzwords are good governance and transparency. It is hoped that he reviews his decision since it sends out the wrong signals — that there is little difference between the crony capitalism and corruption of the Congress and the BJP government.