Public Sector

Extracts from letter of E A S Sarma — 15/06/2022  https://countercurrents.org/2022/06/asset-monetisation-counter-productive-analyse-before-you-rush-into-it/

.. NITI Ayog has proposed that gas pipeline assets valued at ₹24,462 crore should be monetised by the Gas Authority India Ltd. (GAIL) to raise additional resources.
https://www.livemint.com/industry/infrastructure/govt-asks-oil-psus-to-come-up-with-monetization-plan-11655236473972.html  In the last financial year, GAIL paid dividends to the tune of Rs 2220 Crores, out of which the finance Ministry has benefitted to the extent of Rs 1,142 Crores. As a well-rated CPSE with the backing of its owner, the government, it can raise additional funds, if necessary, at a much lower cost, compared to the highly devious route of monetising its assets to a private company with a lower credit rating, without the backing of the government. This will also force GAIL to lose control over those assets for no valid reason. Has your Ministry, with the support of the excellent team of economists at its command, ever tried to analyse the merit of such a bizarre proposal?

The government ...strip(s) the CPSEs of the bulk of the internal surpluses generated by them, by insisting on their paying high dividends. and also ask the CPSEs to lose control over their assets through monetisation,.. ... The idea that “additional resources” would accrue through disinvestment is an illusory one, as even those resources would have to come only from the same pool of savings from which the government borrows. The difference is that such disinvestment proceeds would not only come on less advantageous terms but also it would force the government/ CPSE to lose control over the assets.

In all, the CPSEs provided dividends, mostly to the government, to the extent of Rs 15,237 crores during 2020-21 ( https://www.newindianexpress.com/business/2021/oct/28/govt-gets-rs-15237-crore-dividends-from-cpses-so-far-this-year-2376687.html  ). Experience with the privatisation of the CEL and Pawan Hans has shown that most disinvestment adventures end by handing over such excellent CPSEs to non-descript companies with highly dubious antecedents.

The tragedy with the CPSEs today is that the government, their owner, has failed to identify the strategic ones among them and charter a well thought out vision aimed at building self-reliance for the country. CPSEs such as the CIL and the ONGC are required to utilise their surplus internal resources by reinvesting the same in exploring and developing greenfield deposits to be able to enlarge the natural resource base and make the country self-reliant, rather than becoming unduly dependent on imports. Unfortunately, the government has not been able to empower them sufficiently so as to enable them to discharge that responsibility, as a result of which the country has since become heavily dependent on both oil and coal imports. Had the government realised the strategic importance of such CPSEs, it would not have drained their internal resources by forcing them to give dividends at the expense of their being able to adopt a more sustainable long-term vision.

E A S Sarma, Former Secretary to Govt of India,
Visakhapatnam

How was BSNL KILLED (strategically) by the Powerful people of India? : BSNL Tragedy Case Study https://www.youtube.com/watch?v=Wlgk8XXHWuA 
23 April 2022

For the past 1.5 years, we have been hearing the news about Govt’s plans to shut down BSNL, and ever since we started following the news, we have always seen BSNL incurring 1000s of crores of losses every single year, infact in the past 10 years, BSNL has incurred a combined loss of more than 80,000cr. and considering the case of Air India and govt bureaucracy in general, we by default assume that BSNL is also one of the ill-run businesses that the govt just can't handle isn't it!!

Well, guess what guys, in FY21 while the market went crazy to see Reliance jio generate a profit of Rs 12,537 crore, very few of us know that there was a time when BSNL generated a profit of 10,183cr! and from 2001–2008 Bsnl had generated a cumulative profit of 46668 Cr which was more than the next 3 telecom operators combined and that too in spite of all the subsidized schemes that it rolled out. and not just that it once had a market share of 70% and literally acted as the backbone of Indian telecommunication.

So The question is What exactly went wrong with BSNL that it suddenly went from being a jewel of India to a sick company in less than a decade?

Was it yet another govt mishandling or was it deliberately paralyzed by the private sector?  and most importantly, as citizens of India, what are the lessons that we need to from the Tragic downfall of BSNL?

“They want to let BSNL die”: The rot inside India’s government-owned telecom firms https://qz.com/india/1936622/why-indias-bsnl-mtnl-are-losing-out-to-firms-like-reliance-jio/ November 23, 2020

“We have also known for a long time that our old landline copper cables need to be upgraded to fibre cables, but we have not been given the budgets,” said Shirke, the section supervisor.

But the most glaring disadvantage for BSNL and MTNL is the fact that they are still stuck with 3G technology, while a large number of consumers have rapidly moved on to 4G since 2016. “The government has not allowed us to get a 4G license even though all our private sector competitors provide 4G,” said John. “So naturally we are losing customers we cannot blame them for choosing better and faster services.” In the Rs70,000 crore revival package approved for the companies last year, nearly Rs 24,000 crore was meant to be for allocating 4G spectrum to BSNL and MTNL. A tender for buying 4G equipment from Chinese companies Huawei and ZTE was finalised, but in July, BSNL was forced to cancel the tender. After 20 Indian soldiers were killed during a stand-off with the Chinese army in June, the central government barred public sector companies from striking any deals with Chinese companies. “But private companies were not stopped from such deals. How is this fair?” said Shirke.

The combined impact of outdated services and lower staff will inevitably mean a drop in customer base and even bigger financial losses, say unions. “The government is giving encouragement to private players in the industry, but letting its own organisation stagnate,” said Dinesh Mistry, the assistant general secretary of the National Union of BSNL Workers. “Every decision that the government has taken has been against the interests of MTNL-BSNL,” said Arvind Sawant, the head of the MTNL Kamgar Sangh and also a member of Parliament from the Shiv Sena. “They want to let BSNL die.”

Behind BSNL and MTNL’s poor services: A retirement scheme, staff shortages and delayed 4G https://scroll.in/article/977512/behind-bsnl-and-mtnls-poor-services-a-retirement-scheme-staff-shortages-and-delayed-4g 
Users across the country are giving up their MTNL or BSNL connections as the loss-making public sector companies struggle to stay afloat. 
Aarefa Johari
Nov 19, 2020 ·

Modinomics & LIC : डूबती कपनियों की मददगार एलआईसी को भी डूबाने की तैयारी.. https://www.youtube.com/watch?v=S7wBtdwGRcg 
sSep 10, 2021

Jagrut Bhatt

Sir, AIIEA , LIC employees' union is the biggest trade union in LIC having more than 80% membership of Class 3 & 4 employees.This union is fighting tooth & nail against LIC IPO, privatization and opening of Life insurance sector to FDI.
But like farmers and other class-agitations, the government is totally ignoring the union's opposition and agitation. This is the situation.

G.C. Mathur

The trade unions in these PSUs must rise to protect their rights of protecting their livelihood politically. This is the time they realise that they are voters and must assert themselves as citizens of Indian democracy.

Privatisation: Centre May Sell its Stake in Central Bank of India and Indian Overseas Bank https://gaurilankeshnews.com/privatisation-centre-may-sell-its-stake-in-central-bank-of-india-and-indian-overseas-bank/ Earlier, in May the government had given the in-principle approval for the disinvestment and transfer of management control in IDBI bank.

https://gaurilankeshnews.com/save-public-sector-building-a-mass-movement-against-privatisation/