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Divestment must be the last option

The cat is finally out of the bag and it is appreciable that the new finance minister in Arun Jaitley has shown prudence as far as loss making public sector units (PSUs) are concerned. By selling them to the private sector not only will the losses be curtailed but some of them may actually metamorphose into profit making entities. Also it is very heartening to know that here is finance minister who is also equally concerned about how the taxpayers money should be utilised for better purposes than to sustain loss making sick entities. But where should the FM begin from? One of the foremost contenders is definitely the pandemonium struck Air India.

The fact that Air India is a loss making entity needs no verification. Regular delays, non functional aircraft, procedural hampering and a striking workforce can never bring it at par with private flyers especially Indigo and Jet Airways which have captured both the domestic and international sectors respectively. Air India, which was committed a Rs 30,000 crore bailout package by the previous UPA government in 2012 has failed to still get its troubled house in order. Airspace in India is no longer the public sector’s playing field and there seems no prudence in continuing with a public carrier when there are much more efficient and effective options available. Air India for the record, posted a net loss of around Rs 5,000 crore in the last fiscal. Air India had then put the blame squarely on a weak rupee as compared to the US dollar and had suggested that the escalating operational costs were due to the expensive aviation fuel.  

The Bharat Sanchar Nigam Limited (BSNL) and its sister concern the Mahanagar Telephone Nigam Limited (MTNL) should be next on the FM’s culling list. With cumulative losses of more than Rs 11,000 crore rupees, BSNL and MTNL have been faltering in whichever telecommunication service domain they have ventured in. Another factor that the FM needs to take into consideration is the sheer number of employees that these public sector behemoths employ.

To quote a leading pink newspaper, BSNL employs 25 times more employees than Bharti Airtel does and MTNL has three and a half times more employees with barely a tenth of Bharti’s revenue. India has 79 loss making PSUs of which 49 are sick and the government investment in them is a whopping Rs 1, 57,000 crore. While it is a welcome move on the FM’s part, the government should also consider the fate of the employees who may be rendered without employment if the entities they are part of are sold to private players. While the technical and the industry qualified staff might just be able to find employment, others might find themselves at crossroads.
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