Economic Survey 2019: The Economic Survey 2019-20 has identified investments as a key growth driver, but one area which could go a long way in propelling India’s growth without costing as much is: taming PSU white elephants, says renowned fund manager Nilesh Shah. Ironing out inefficiencies in PSUs could help growth a lot. “There are white elephants rearing in our public sector enterprises. The same underperforming people when employed in the private sector create miracles,” Nilesh Shah, Managing Director, Kotak Mahindra Asset Management, said in an interview to ET Now, shortly after Economic Survey 2019 was revealed.
Nilesh Shah took an example of Hindustan Zinc to drive home his point. Hindustan Zinc has 10 times more production now under private ownership, as compared to when it was a PSU, Nilesh Shah noted. Further, he pointed out to the news relating to government bailing out BSNL by shelling out Rs 72,000 crore. “We have seen the miracle unleashed by private sector telecom players, in terms of providing data and connectivity. I think if we iron out these inefficiencies, we will have all the resources for revenue spends, and yet achieve fiscal discipline,” Nilesh Shah said.
Also read: Economic Survey 2019 HIGHLIGHTS: GDP growth getting stronger, fiscal consolidation on track, and more
The Economic Survey 2019 tabled in the Parliament a day ahead of general budget 2019 has predicted the GDP growth to get stronger, pegging it at 7% in the current financial year 2019-20, up from 6.8% in the previous fiscal year. The maiden survey by Chief Economic Adviser KV Subramanian on Thursday also said that the government has stood by the promise of fiscal consolidation in FY19.
Explaining that the centre should focus on the revenue side instead of the expenditures, Nilesh Shah said that the expenditures are committed for a variety of reasons including political and economic compulsions. Comparing the time taken to construct the Metro rail in China versus that in India, Shah said that the average speed of constructing the Metro in India is 25 kms per year, while China constructs at 300 kms per year. “We had a scenario in Mumbai, where Metro activity had to be stalled after PIL by the residents that the construction puts in danger a religious place, and it took six months to resolve the issue,” Nilesh Shah said, adding that if India could reduce this time taken to six hours, instead of six months, to that extent, the projects’ execution will be quicker.