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Disinvestment of Public Sector Enterprises. Is it a right step?

Disinvestment of Public Sector Enterprises. Is it a right step?

#SSC-CGL2018 #SSC-CHSL2018 #IB #SBI-PO  (250 words)Important Topics for SSC, IB, BANK


“We shouldn’t be selling the family silver to pay the grocery bill.” The quote is behind the rationale of disinvestment of Public Sector Enterprises (PSEs). As for India, this notion of disinvestment came back in 1991 when government almost became bankrupt. While the intention behind PSEs arose from the foundation to speed up self-reliant economic growth. Things transformed since then.
While there are 235 CPSEs contributing around 20% of India’s GDP. Many of them have turned into bloated inefficient behemoths and a ditch on the public exchequer. While a CAG report highlights around one-third PSEs are running on losses. States too not much behind with over 1000 PSEs mostly ailing. Post-1991 there were major overhauls in organising these PSEs to run in profit but all such attempts almost failed as socialistic governments used this to mollify the masses as it employs over 1 million individuals. But as CAG highlighted the burgeoning debts, disinvestment as a remedy should be considered at. The resources that grow from such disinvestment can fund ailing ones and promote social indicators like health, education, nutrition, etc.
PSEs are helpful in those areas where the government has monopoly-like space, nuclear technology, railway or sectors where private enterprises aren’t eager to invest like the rural health sector. As PSEs help the government channelise its wealth to improve the conditions of destitute. There should be a unique synergy between private and public enterprises as both can’t be divorced. 
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