Disinvestment of Public Sector Units in India

India is plagued by its inefficient and impotent public sector.[1] Barring a very few, 254 Public sector units (PSU) incur heavy losses. However, they continue to exist due to state granted monopoly and excessive assets. Being huge burden on taxpayers, they almost always returned less than investment. In the period of 1986-1991, State owned enterprises made 39% of GDP as gross investment, but generated only 14% of GDP.[2] Conceding to demands of privatisation and with tough resistance from labour unions, government of India is slowly divesting from PSUs. The below table provides the data for divestment which started from 1991(Barring 2 small units CMC Limited and Patherele Concrete).

In order to avoid more losses (at taxpayer's expense) incurred by inefficient and loss-making PSUs, the BJP-led Vajpayee government (1999-2004) made four strategic disinvestments - in Bharat Aluminium Company (BALCO) and Hindustan Zinc (both to Sterlite Industries), Indian Petrochemicals Corporation Limited (to Reliance Industries) and VSNL (to the Tata group).[3]

Year Total Receipts (Rs. crore)

(Inflation adjusted to 2016 Prices)

1991-9217,314
1992-939,868
1993-940
1994-9523,387
1995-96678
1996-971,399
1997-983,143
1998-9916,624
1999-005,512
2000-015,261
2001-0215,131
2002-038,662
2003-0438,611
2004-056,614
2005-063590
2006-070
2007-088,469
2008-090
2009-1038,748
2010-1133,881
2011-1219,418
2012-1330,507
2013-1418,304
2014-1526,901
2015-1625,147
2016-1746,246
2017-1871,105(target)

[4][5]

See also

References

  1. ↑ "Indian PSUs inefficient, impotent: Chinese daily". News18. Retrieved 2016-05-27.
  2. ↑ "Deepak Singh on Twitter". Twitter. Retrieved 2016-05-27.
  3. ↑ "'Privatisation' makes comeback after 10 yrs". Retrieved 5 July 2017.
  4. ↑ http://dipam.gov.in/disinvestment-till-now/2502
  5. ↑ "Inflation Calculator India 1971-2016". calculatorstack.com. Retrieved 2016-05-27.
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