Drivers of the economy
Spectacular achievements of the Public Sector Enterprises has powered the Indian economy towards a high-growth trajectory
On the threshold of joining the hand of progressed economies and moving forward to achieve the grand vision of becoming a $5 trillion economy in the next five years, Public Sector Enterprises (PSEs) which have played a stellar role since their inception and even in the most difficult times of the recent and earlier recession would continue to power the growth of the economy through their impressive performance. Their contribution to the nation-building and their response at the true hour of need has been significant. This is perhaps the primary reason why, today, India is being considered a global force to reckon with.
PSEs have been the driving force for the socio-economic development of the country. They have fared impressively in all parameters of performance. For the last five years, PSEs have been earning a net profit of over Rs 1 lakh crore every year. During the year 2017-18, Central PSEs have shown impressive performance in almost all financial parameters be it investment, turnover, net worth, profit, reserves & surplus, contribution to central exchequers, foreign exchange earnings, total income, etc.
During the year 2017-18, the overall net profit of 257 operating CPSEs was Rs 1.28 lakh crore compared to Rs 1.25 lakh crore during 2016-17, displaying an overall growth of 2.29 per cent. Their contribution to central exchequer during 2017-18 was an all-time high of Rs 3.50 lakh crore, and for the last four years, CPSEs have been contributing over Rs 2 lakh crore to central exchequer every year. The total gross revenue from operation of all CPSEs stood at Rs 21.55 lakh crore – about 15 per cent of the total GDP in terms of turnover. Above all, since their inception, CPSEs have been an effective instrument for the growth of the country with social justice as CSR in their DNA. Their CSR expenditure was to the tune of Rs 3442.42 crore in 2017-18, showing an increase of over 3 per cent from the previous year. Foreign exchange earnings through exports of goods and services stood at Rs 86,980 crore in 2017-18. CPSEs shares are dear to investors as 52 CPSEs, which trade on the stock exchange, contribute to 10.70 per cent of the total market capitalisation of BSE. It aggregates to Rs 15.22 lakh crore as on March 31, 2018. The financial strength and vigour of the PSEs are not only reflected domestically but even across borders.
In the Forbes 500 list announced in 2018, a total of seven Indian companies have found their place on the coveted list of which four are PSEs. PSEs contribution in total production of coal (92 per cent), crude oil (72 per cent), natural gas (80 per cent), power capacity (55 per cent), etc., is noteworthy. Now they are required to partner government with its space mission.
In the Budget speech 2019-20, creation of a new public sector namely New Space India Ltd. has been proposed which will be a commercial arm of ISRO to spearhead commercialisation of various space products including their marketing.
To attain fairness and transparency with the right accountability, Public Sector Enterprises have robust corporate governance practices in place. It is widely accepted that PSEs are open and transparent, ensuring fairness in their transactions within and outside the company with investors, customers, employees, partners, competitors and society at large. They were required to comply with several rules and regulations under an elaborate system of Parliamentary and governmental control. PSEs have taken several steps and structured initiatives beyond what was expected of them for the benefit of stakeholders. This has increased the confidence of stakeholders in PSEs.
Over 100 PSEs have also signed the Integrity Pact with Transparency India International. While all these have helped in improving the governance of PSEs, the multiplicity of control structure needs to be streamlined so that they can perform on optimal levels.
(The author is Director General, SCOPE)