When even die-hard Socialists seem to be reconciled to letting perennially sick public sector units (PSUs) being either privatised or left to waste away, Kerala is showing another way. The state is not just propping up haemorrhaging PSUs but is pulling them out of the red; some are even making decent profits. A surprise silver lining in the generally lacklustre three-and-a-half years of the LDF Government, this has been achieved without compromising on the policy of not liquidating or privatising PSUs or retrenching workers.
The number of profit-making units of the 42 PSUs under the Industries Department climbed from 12 in 2005-06 to 24 the next year, reaching 29 in 2008-09. The department expects to turn 32 companies around by 2009-10. While all the 42 PSUs posted a combined net loss of Rs 69.49 crore in 2005-06 when the new Government came to power, the very next year saw them making a net profit of Rs 91.43 crore. The last financial year witnessed the figure climbing to an impressive Rs 169.45 crore. The period also saw the combined value of production from these companies grow from Rs 1,383 crore to Rs 1,770 crore, and turnover from Rs 1,523 crore to Rs 2,105 crore.
For the full text that appeared in the India Today, click here
All very well, though some of the steps employed like "mandatory product purchase by government departments" can be considered questionable. The even more important question however is will such a performance outlast the state Industries Minister and chief architect of the turnaround, Mr Elamaram Kareem? Can anything that is individual dependent/ driven be a sustainable model?
On the other hand is the Corporate sector, whose performance report, put together by the millions of share-holders on the basis of expert analysis, is available on a minute to minute basis in the form of share values, of course all under the watchful eyes of the regulator - SEBI.
So, which is better? And then the question, how much can the government handle - check this?
Muralidhar Rao
Forward this Blog entry
