77 public sector enterprises operating at loss

Public sector enterprises have contributed largely to the growth of the country. Public sector enterprises emerged as pillars of pride in the post-independence era. These institutions were conceived with the idea that government-owned institutions would benefit the people in the future and would contribute to the building of a socialist society without seeking excessive profits. Although this was a great idea in theory, the reality saw a vast majority of such enterprises splurging into losses.

The authorities always loathed the idea of encouraging the private sector along with the establishment of public sector enterprises. Private sectors were labelled as exploiters, causing India's growth to stagnate for many years. Western countries turned into superpowers only after starting from scratch post World War 2. Such a phenomenal achievement would not have been possible without the private sector. However, in India, attempts to bring private enterprises to the forefront were stymied in the name of license raj.

In the old days, people applauded the idea of nationalization. The head of the government back then even nationalized Tata Airlines, which was till then, looked after well by the Tata group. Decades later, the airline company, mired in loss, had to be returned to the Tata group.

The government can collect taxes and run social service projects well, but the loss figures incurred by public sector enterprises validate a fact. Running a business is a different game, and for a novice in the trade, it is better to stay aloof than get battered. There are a total of 149 public sector enterprises under the state government. Of these, 77 are operating at a loss, and 18 are not even operational. Only 4 are operating in profit. This is the first time that the Comptroller and Auditor General's report has recommended that loss-making public sector enterprises be sold to the private sector or closed down.

The 36 public sector enterprises functioning by borrowing and lending money have not even been able to pay the interest on their loans. The idea of private companies taking over such institutions would end up benefitting the government treasury.

The loss incurred by public sector undertakings to the government in the last year is Rs 18,026 crore. It is never too late for the government to change its policy in favor of private investment.