‘CPSEs are now showing their mettle on bourses’

Standing Conference of Public Enterprises (SCOPE) is a representative body of central public sector enterprises (CPSEs). SCOPE chairman Arup Roy Choudhury, who is also the NTPC chief, spoke to Fe?s Noor Mohammad about the significance of the public sector in the national economic life. Excerpts:

How has the central public sector grown over the years?

Public sector enterprises were set up after Independence to develop the basic infrastructure of the country. These enterprises were called the Temples of Modern India by Pandit Jawahar Lal Nehru, independent India?s first prime minister. In the first five-year Plan there were only 5 central sector enterprises, which have now grown to almost 250. Their total investment is in the range of R5,79,920 crore.

As part of the economic liberalisation undertaken by the government since 1991, sectors that were once the preserve of the public sector were opened to the private sector. In the competitive environment, PSUs have performed well despite their social commitments.

Has the sector made due contribution to the national economy?

Public enterprises are a major source of strength to the economy as wealth creators. The CPSEs? contribution to the economy is unparalleled. CPSEs contributed R1,39,830 crore to the public exchequer by way of excise duty, custom duty, corporate tax and dividend in 2009-10. Their aggregated turnover was R12,35,060 crore, which is a significant contribution to the central government?s revenues.

The government is diluting its stakes in profitable PSUs as a policy. How does it help the PSUs?

The listing policy on disinvestment in CPSEs has evolved over the years. The inherent advantage in listing the shares of profitable CPSEs is higher disclosure levels, greater transparency and enhancement of corporate governance.

The process leads to greater people ownership of CPSEs and the sharing of their prosperity by the general public.

How has the sector fared as a wealth creator?

Public sector companies are now showing their mettle on the bourses and thus gaining investor confidence. The total share of all the 50 listed CPSEs is about 25% of the total market capitalisation of some 7,000 companies listed on the BSE. This reflects the confidence of investors in the sector.