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Public sector here to stay: PM

Prime Minister Manmohan Singh at the presentation ceremony of the MOU Excellence Awards and SCOPE Awards in New Delhi on October15, 2009.
Prime Minister Manmohan Singh at the presentation ceremony of the MOU Excellence Awards and SCOPE Awards in New Delhi on October15, 2009.

Prime Minister Manmohan Singh today said the public sector enterprises (PSEs) were there to stay in the Indian economy and declared that his Government was committed to giving them the flexibility and autonomy they required to operate effectively in a competitive environment.

Speaking after presenting the MOU Excellence Awards and SCOPE Awards for Excellence and Outstanding Contribution to Public Sector Management here, Dr Singh said the PSEs had done quite well in recent times and were poised to grow even faster in the years to come.

He recalled that when the Government had begun the process of liberalising the economy in the early nineties, many experts were of the view that the PSEs would not be able to face local and increased global competition.

"Many years down the line, these fears and apprehensions have proved to be unfounded," he said, pointing out that in the post-reform period, 1990-91 to 2007-08, their turnover had increased nine times and their cumulative net profit had grown more than 35 times.

He said that, despite the fact that some PSEs did not do so well in this period, on the whole the Government had reasons to be confident about the ability of India's public sector to operate in an increasingly open environment and thereby face the challenge of increased competition both domestically and globally.

"There is no denying the fact that public sector enterprises are here to stay in the Indian economy. Some of them have shown sustained profitability and good consistent performance. The listed ones on the Stock Exchanges account for more than 24 per cent of the total market capitalization of the Bombay Stock Exchange (BSE). In terms of market capitalization, of the top 10 listed companies on the BSE, five are public sector enterprises," he said.

Dr Singh said more and more PSEs were entering the capital markets and striving to become active global players. Over the years, the number of PSEs making profits had steadily increased while the number of those making losses had been on the decline, he observed.

He said India had weathered the ongoing global slowdown better than most countries and India was today the second fastest growing economy in the world. He said this was a reflection, in large measure, of the strengths of the economy, one of which was a robust and reliable public sector.

Prime Minister Manmohan Singh with awardees of the MoU Excellence Awards and SCOPE Awards in New Delhi on October 15, 2009. Union Minister of Heavy Industries and 

Public Enterprises Vilasrao Deshmukh is also seen.
Prime Minister Manmohan Singh with awardees of the MoU Excellence Awards and SCOPE Awards in New Delhi on October 15, 2009. Union Minister of Heavy Industries and Public Enterprises Vilasrao Deshmukh is also seen.

He said India had become one of the few countries whic had implemented a Code of Corporate Governance for its PSEs.

He said several PSEs had got their shares listed on the stock markets and many more were eager to do so.

"This is a measure of the increased vitality of our public sector. This also shows that they are not shying away from the processes of market scrutiny and that they are ready to face new challenges in an increasingly competitive world," he remarked.

The Prime Minister said that if India were to regain its place in the comity of nations, there had to be sustained efforts on its part to improve productivity, to pay increasing attention to research and development and to operate on the frontiers of modern scientific and technological knowledge.

He said the Government had delegated more powers to the Boards of "Navratna" and "Miniratna" companies to help them improve their performance. The Government had also
implemented revised salaries for executives of PSEs and introduced innovative measures such as performance-related pay. The incentives for the employees have been linked to individual, group as well as company performance, he said.

He said the Government expected all this to lead to sound practices for the development of human resources, which are of critical importance in today’s competitive environment.

Dr Singh said the Government was encouraging the listing of PSEs on the stock exchanges as it would unlock the true value of a company, improves its corporate governance standards and also help it in raising resources for funding future expansion plans.

As far as sick and loss making organisations are concerned, he said the Government had made efforts to restructure and revive them, wherever it was possible.

He said an amount of Rs. 15250 crore had been provided by the Government in the last five years or so as cash and non-cash support to 36 such enterprises.

"We will continue to take steps to strengthen the public sector to enable it to play the role expected of it in a modern, fast growing economy," he added.

The award winners for 2006-07 were Bharat Heavy Electricals Ltd. (BHEL), Bharat Petroleum Corporation Ltd. (BPCL), Hindustan Aeronautics Ltd. (HAL), Mineral Exploration Corporation Ltd. (MECL), Manganese Ore India Ltd (MOIL), National Building Corporation of India (NBCC), National Backward Classes Finance & Development Corporation (NBCFDC) and State Trading Corporation of India Ltd (STC).

The SCOPE Excellence Awards for the year 2007-08 were presented to the Steel Authority of India (Individual Category); Coal India Limited (Institutional Category); Heavy Engineering Corporation (Special Institutional category); Electronic Corporation of India Limited (Medium PSE Category; WAPCOS (Smaller PSE Category) and NSKFDC (Commendation Certificate in Smaller PSE Category).

For the year 2006-07, the SCOPE Excellence Awards were received by the Indian Oil Corporation (Individual Category); Steel Authority of India (Institutional Category); Mazagaon Dock Limited (Special Institutional Category); Bharat Earth Movers Limited and National Building Corporation Limited (Medium PSE Category) and Rajasthan Electronics and Instruments Limited (Smaller PSE Category).

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