Veterans of Public Sector hit back saying this is "sponsored" propoganda with vested interest of corporates
State-run enterprises have been the biggest wealth destructors in the last six years despite operating in monopolistic or oligopolistic setups, said some asset managers and the same was reported in sections of the media very recently.
"If you look at the biggest wealth destroyer over the last six years, it has been the government-owned companies... PSUs (public sector undertakings) including PSU banks, PSU utilities, PSU oil companies etc. While it is nice to tell Indians to reform, we also have to hold mirror in some of these," Franklin Templeton's chief investment officer (CIO) Anand Radhakrishnan is reported to have said.
Navneet Munot, CIO of SBI MF, commented that the PSU indices have been flat since March 2009 as against a five times return for many other asset class. "That is the kind of wealth destruction that has happened. Several of these companies are monopolistic businesses or oligopoly, they have huge kind of assets and cash flows. I think we need to get that part of the piece right.". Several other speakers also towed the same line and this has started a new and a big debate in the PSU world.
Thomas Franco, Former General Secretary of All India Bank Officers' Confederation (AIBOC) reacted sharply to say "Mr. Radhakrishnan is totally ignorant. Let him read Public Survey Report 2018-19 which was released by the government itself. I condemn these people who might be on the payrolls of Ambani for making such irresponsible statements".
C.Srikumar, General Secretary of All India Defence Employees Federation and Convener of the Public Sector Unions of AITUC, he was vociferous and condemned the statement that PSUs are wealth destroyers and he went on saying that it has now become a fashion by some vested interested elements to abuse and write malicious articles against government sector and public sector of our country. We cannot accept the mischievous and baseless statement, that the PSUs are biggest wealth destroyers. This statement shows the ignorance and the biasness of these persons, he says.
Srikumar said "Public Sectors Enterprises are the real Wealth Creators of our country. It may be public Sector Mines, Steel, Coal, Banks, Insurance, LIC, Oil and manufacturing industries like BHEL, HAL, etc., their contribution to the growth and development of the economy, industry, infrastructure, the society is laudable. Their contribution for generating employment, especially to those people who belongs to the socially and economically down trodden communities is the most important contribution of the PSUs. The Public Sectors have helped in the social, cultural, educational and social activities development of the areas surrounding the Public Sector Enterprises. Many Small Scale Industries and MSMEs are developed by the PSUs, Railways and Ordnance Factories. Thousands of Skilled Workers are created by the Railways, Ordnance Factories and PSUs by training them in different types of Trades through the Apprentice Scheme. Which private sector has contributed for the social upliftment of our country. They are only for loot and swindling the Tax payers money by not even paying back the loans they have taken from the Nationalised Banks. None of the Public Sectors are tax evaders, whereas there is a big list of Private Sector Tax evaders, even though the government gives them huge concessions on tax".
Alok Roy, President of National Confederation of Officers Associaton and Indian Oil Officers Associaton said that the prime purpose for PSUs are not to generate profit but also to ensure the goods & services to all corners at the same cost. Further, PSUs give priority treatment to MSMEs, give special reservations in employment to under prevailages section of society as well implementing social security scheme of Govt of India. Inspite of it, most of the central PSUs have generated decent profits year after year, one of which is on the radar of Privatisation by Govt of India.
Roy adds "unfortunately while comparing the wealth generation, so called experts always miss two major points -
A. Total wealth erosion by select pvt sector enterprises viz All Anil Ambani companies, Vodafone idea, yes bank, kingfisher, jet airways, Satyam computer, Himachal futuristic, GTB etc.
B. In the process to arrange fund to govenement, huge divident had been paid by PSUs, which has gone to shareholders also. The Dividend yields for Shareholders has been highest for PSUs.
All so called expert internationally avoid considering above aspects in their analysis
Sanjay Das, General Secretary of the West Bengal Chapter of All India Bank Officers' Confederation (AIBOC) says that on the contrary rather I should say that the PSU companies are greatest wealth creator. The contribution of PSU towards Wealth creation not always been reflected in balance sheet but many a times it had an indirect effect in Nation Building . The yeomen service given by the Indian Railway for nation building till today can it be denied, he asks.
During the natural calamities and even now in covid pandemic situation the service given by the government under Vande Bharat mission operating around 64 flights to bring back around 15,000 Indians stranded abroad. The Indian Navy is also being used for the proposed evacuation.If you quantify it then in monetary terms it may not be wealth creator but is it not the need of the hour? Indirectly it has created wealth. Steel sector was to propel the economic growth and rapid industrialization of the country, and since 1973, SAIL steel has played a pivotal role in transforming the nation. Is it not wealth creation?, he quips
Das says "PSBs are contributing a lot .Yes Bank failure was very recent event....Had there been no SBI what would happen to that yes bank?Is it not wealth creation? Otherwise there would have been a loss of wealth. PS Banks concentrate attention in APY,PMJDY and invest maximum workforce in it....It is not wealth creation for it's own rather loss making item for PSU banks but is it not building the wealth of Nation by making inclusive India through financial inclusion ? Are they not playing supportive role for smooth implementation of Govt schemes? Is it destruction of National Wealth?If it is so then all such schemes are also eroding wealth. Everything can not be measured in terms of wealth creation or profit making.
Our GDP is having 4 pillars....Export,Public sector investment,private sector investment and Consumption. Export is almost nil, Consumption has gone down, Private players are risk averse. Therefore, for improvement of GDP only hope is Public sector investment".