Public sector with dip in growth; PSUs that are white elephants

Going through the financial review report, one would feel that there is no future for the public sector institutions of the state from the bad name of white elephants. Out of 51 PSUs, only thirteen make any profit at all. All thirty-eight are in persistent loss. 13 PSUs in profit have earned a total profit of Rs 423 crore in 2021-22. However, in the current financial year, the profit fell sharply to Rs 41 crore. The performance of 38 loss-incurring PSUs is also similar.

If the loss was Rs 452 crore in 2021-22, it is predicted to increase to Rs 492 crore in the current year. Public sector institutions have always been considered as the darlings of the government. PSUs have nothing to fear here as long as it is considered a sacred practice and a ritual to feed them no matter how much loss they incur.

Look at the status of KSRTC, the largest public sector organization in the state. Despite having monopoly routes and around five thousand buses across the state, the corporation is sinking from loss to bigger loss. The government has to provide substantial assistance every month to pay the salaries of the employees. Even though the daily income is around 8 crore rupees, there is no money to set aside for salary due to the burden of debt. No other PSU in the state can beat KSRTC in terms of losses.

Rest assured that KSRTC has a unique existence. However, the story of PSUs under the direct control of the government is also no different. Most of them are struggling to move forward. Many public sector organizations are places where interested individuals can be accommodated. Kerala is known as a consumer state. Whatever is needed, they have to be imported from elsewhere. Even iron nails are among them. The public sector is not ready to take a step towards product diversification after seeing the market demand.

Most of the companies are stuck with the traditional products. Obsolete machinery, lack of working capital, inability to keep pace with changes in technology, lack of product diversification, and inability to compete with the private sector are many of the constraints faced by public sector organizations.

From time to time, expert committees warn the government against continuing to run loss-making institutions for years. However, the government is not ready to give up any of them because of its commitment to the public sector. Firms operating in a similar nature are not even amalgamated. Their luxuries, extravagance and overspending are a big burden on the public exchequer. It is only recently that a separate recruiting board has been created for recruitment in public sector organizations. This extravagance happened when a twenty-one-member PSC already exists.