In India, 70 Public Sector Units (PSUs) were in a loss as of 31 March 2019, with their total stress amounting to over Rs 31,000 crore collectively.
In India, 70 Public Sector Undertakings (state-run companies) were in a loss as of 31 March 2019, with their total stress amounting to over Rs 31,000 crore collectively. Out of these, state-run carrier Air India, telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) were the top three loss-making PSUs in fiscal 2018-19, Prakash Javadekar, Minister of Heavy Industries and Public Enterprises, said in a written reply to Rajya Sabha on Monday. According to the reply, BSNL lost Rs 14,904 crore; Air India’s losses were at Rs 8,474 crore and MTNL’s losses stood at Rs 3,390 crore.
PSUs such as Orissa Mineral Development Company Ltd., Chennai Petroleum Corporation Ltd., Hindustan Newsprint Ltd., National Textile Corpn. Ltd., State Trading Corpn. of India Ltd., also reported losses in hundreds of crores. The reasons for the failures of these PSUs were also provided. While the reasons of failures differ from The reasons for losses differ from one enterprise to another, “Common problems faced by loss-making CPSEs include obsolete plants and machinery, heavy interest burden, resource crunch, low capacity utilization, low productivity, surplus manpower, high input cost, non-remunerative prices etc,” the Ministry said.
Government’s efforts to address reasons for losses
The government is also doing its bit to get the CPSEs out of their stress. These measures include “business restructuring, formation of joint ventures, modernization and improved marketing strategies, corporate governance, professionalization of boards of CPSEs etc,” according to the reply. However, the government said that getting these CPSEs back on track is a continuous process.
The government has also been trying to divest its stake in the national carrier Air India and the Minister Of Civil Aviation, Hardeep Singh Puri, has time and again said that it is not the government’s business to run businesses. The Indian government looks to offload 100% of its stake in the airline and is looking for a prospective bidder for the airline.