Coal India Ltd and ONGC have also suffered erosion in the market capitalisation in FY18, compared to the previous year.
Even as the government makes efforts to improve the health of PSUs, their market value is on a continuous decline. “The share of the market capitalisation of PSUs was 26.36 per cent of the total market capitalisation of the BSE in FY10, which is less than halved to a mere 10.7 per cent in FY18,” Prakash Javadekar, Minister of Heavy Industries and Public Enterprises, said in a reply to a question in Rajya Sabha. Coal India Ltd and ONGC have also suffered erosion in the market capitalisation in FY18, compared to the previous year. India’s public sector companies have been struggling with low profitability for a long time.
The government had earlier identified a list of sick 56 sick PSUs, which were in a cumulative loss of Rs 1,32,360 crore in FY18. Air India Express Ltd., Air India Engineering Services Ltd., Bharat Coking Coal Ltd., BHEL Electrical Machines Ltd, Hindustan Photo Films Manufacturing Co Ltd, Indian Drugs & Pharmaceuticals Ltd and Mahanagar Telephone Nigam Ltd. (MTNL) are among the 56 sick public sector enterprises, which have their net worth in negative. In 2017-18, the collective net worth of such sick PSUs was in negative of Rs 88,556 crore.
Meanwhile, the depleting profitability of the Indian PSUs has also adversely affected their CSR contributions. While the CSR spending of the private companies increased over the three years to FY18, the same for PSUs fell from Rs 4,214.67 crore in FY16 to Rs 2,553.36 crore in FY18, according to data given by Anurag Thakur, MoS, Ministry of Finance and Corporate Affairs in Rajya Sabha.
On being asked about the plans for the revival of PSUs, the government replied that the improvement in the performance of PSUs is a continuous process and enterprise-specific measures for their turnaround are being taken by the concerned ministries and departments.