Board for Reconstruction of Public Sector Enterprises (BRPSE) was established in December 2004 as an advisory body to advise the government on the strategies, measures and schemes related to strengthening, modernising, reviving and restructuring of public sector enterprises. Its chairman Nitish Sengupta spoke to HT on a range of issues. Excerpts:
India has a very large number of Central Public Sector Enterprises (CPSEs) compared to other countries. What are the reasons for this? At the time of independence, India was an agrarian economy with a weak industrial base, low level of savings, inadequate investment and lack of infrastructure facilities.
As such, the State's intervention in all the sectors of the economy was inevitable since private sector neither had the necessary resources nor the will to undertake risks associated with large long-gestation investments. Given the type and range of problems faced by the country, it became a pragmatic compulsion to use the public sector for self-reliant economic growth. There are 260 CPSEs as on March 31, 2012. Out of which 225 are operating and 35 are yet to commence operations. Total net profit of CPSEs is Rs. 97,513 crores.
Post-economic reforms of 1991, would you still say that CPSEs continue to be the mainstay of the Indian economy?
There is no doubt about it. The investment, turnover, capital employees, employment, profits have been increasing. It contributed Rs. 1.60 lakh crores in 2011-12 to central exchequer.
They have spread over the length and breadth of the country and are engaged in diverse sectors of the economy. Even after liberalisation in 1991, contrary to the general perception, CPSEs have been able to compete with both domestic private sector companies and multinational corporations.
How many CPSEs are incurring losses and how many CPSEs are sick as of now? What is the approach of the Government to deal with sickness in CPSEs?
There were 81 sick CPSEs in 2004-05 and their number has come down to 64 by March, 2012. While the reasons for their sickness may vary from unit to unit. The BRPSE has examined 67 proposals referred to it by the Government. It has given recommendations to the Government for revival of 59 CPSEs and closure of three CPSEs. In case of two sick CPSEs,-- Bharat Coking Coal Ltd. and Hindustan Fluorocarbons Ltd., their holding companies --Coal India Ltd. and Hindustan Organic Chemicals Ltd.-- are implementing the revival plan.
What are your views on disinvestment and listing of CPSEs on stock markets?
I always advocate for listing of CPSEs. This will help them to reduce the dependence on Government and can raise funds from market. This will also unlock their true value and promote transparency, corporate governance.