PSUs doing well, no need for disinvestment: Trade unions
NEW DELHI: As the Manmohan Singh-led government contemplates announcement of stake sale in PSUs, which could come as early as the forthcoming
budget, the trade unions are again up in arms against disinvestment. With Left off its back, the government clearly wants to go full throttle on disinvestment and the PM himself has hinted that the process might be initiated as early as the budget in July.
According to these trade unions, however, disinvestment is unwarranted as overall performance of the PSUs has not just significantly improved, but they are also left with enough reserve and surplus to meet any resource crunch or social sector spending.
According to the government's latest public enterprise survey report, which takes into account all of the over 200 PSUs in the country, the reserve and surplus went up from Rs 416,601 crore in 2006-07 to Rs 485,577 crore in 2007-08.
While the reserve and surplus has gone up by over Rs 69,000 crore in a year, the profit of all profit making companies stood at Rs 91,062 crore as against Rs 89,578 crore in the previous year. The loss incurred by firms which are known as loss-making firms stood at Rs 11,332 crore as against Rs 8,457 crore in 2006-07.
"When there is a reserve and surplus of over Rs 69,000 crore in just a year, what does the government hope to achieve by selling stakes to raise Rs 30,000 crore or maybe Rs 40,000 crore. While the NDA tried outright privatisation and lost its government in the process, Congress is trying creeping privatisation which means even though they will first sell not more than 49% and gradually move towards complete privatisation," said former MP and Centre of Indian Trade Unions (CITU) secretary Dipankar Mukherjee, adding that the PSU dividend for 2007-08 was Rs 28,000 crore.
"Going by the official figures, it's obvious that there is no resource crunch. There is an argument in the corporate sector that money is needed for social sectors like health and education. The fact remains that spending money on social sectors cannot be a one-time phenomenon. It is a continuous process and can't be covered just by selling stakes in PSUs," Mukherjee added.
The contribution of public sector companies to central exchequer by way of excise duty, customs duty, corporate tax and other duties went up from Rs 14,878 crore to Rs 165,994 crore last year.
The government is likely to pursue disinvestment aggressively as it, by and large, has popular sentiment in its favour. In states like Tamil Nadu and West Bengal though, it might run into resistance from powerful allies like Trinamool Congress and DMK who will face state elections in less than two years. The government will have to do some serious balancing act as it needs support to ensure safe passage of insurance and pension bills in Parliament.
Action from railway Board New Delhi Required.