Finance Minister Nirmala Sitharaman on Wednesday came out strongly in defence of the performance of India’s public sector undertakings, which have been on a resurgent mode under the leadership of Prime Minister Narendra Modi.
“Increased defence spending and the aim of achieving ‘Atmanirbharta’ in defence is fuelling the growth of PSUs like BEL, HAL, Mazagon Dock. In FY 2023-24 alone, India has reported arms exports worth Rs 21,000 crore. This achievement showcases our government’s robust confidence in our scientists and engineers, a stark contrast to the Congress party that left India crippled, relying heavily on imports rather than empowering our own institutions like HAL,” the Finance Minister asserted on X, hitting out at Rahul Gandhi
In a sharp rebuttal to Rahul’s charges that the PSUs are being dismantled and are in disarray under the current government, Sitharaman called the allegations “a textbook example of ‘Ulta Chor Kotwal Ko Daante, as the facts reveal a very different story.
Sitharaman pointed out that “historically”, it was the Congress that “has shown a lack of faith in our nation’s scientists and engineers, fostering a dependency on imports that branded India as the world’s largest arms importer for many years”.
The Finance Minister credited the Government with better management of PSUs which has led to the total market cap of all 81 listed PSUs (62 CPSEs, 12 PSBs, 3 public sector insurance companies and IDBI Bank) to grow by 225 per cent.
“Notably, 15 CPSEs have experienced an impressive CAGR ranging from 76 per cent to 100 per cent, reflecting substantial value appreciation and investor confidence and additionally, 25 CPSEs have demonstrated strong growth with CAGR ranging between 51 per cent to 75 per cent, while 28 CPSEs have shown steady expansion within the range of 26 per cent to 50 per cent.
Taking the example of Hindustan Aeronautics Limited (HAL), Sitharaman pointed out that contrary to claims, under Prime Minister Modi’s regime, HAL’s market valuation has skyrocketed by 1370 per cent in merely 4 years, rising from Rs. 17,398 crore in 2020 to Rs. 2.5 lakh crore as of 7 May, 2024. The domestic aviation company on 31 March, 2024 announced its highest-ever revenue of more than Rs. 29,810 crore for FY 2023-24 and has a robust order book of over Rs. 94,000 crore. “These figures hardly suggest a “weakening” institution but rather one experiencing significant fortification,” said Sitharaman.
The Finance Minister also decried the “false claims made with respect to people losing jobs after disinvestment”. Citing the instance of Air India, Sitharaman emphasised that the Modi Government had made it a “pre-condition” for the buyer that “there would be no removal or retrenchment of employees for a period of one year and that also, even after a year, there will be a voluntary retirement offer before retrenchment on terms no less favourable than maximum benefits. “PF and gratuity benefits were also offered as per laws.” the Finance Minister pointed out.
Following a “transparent disinvestment”, Sitharaman highlighted that there has been a notable improvement in operations as visible from Air India’s significant growth in employment opportunities with over 7500 NEW employees (both flying and ground staff) having joined the company since privatisation. “So, far from losing jobs, thousands have joined the company. Air India is set to acquire 470 aircrafts from Boeing and Airbus for its fleet expansion at an estimated cost of USD 70 billion,” Sitharaman added.
The Finance Minister drew attention to similar turnaround in Neelachal Ispat Nigam post-privatisation. “The plant started operations within 3 months of acquisition in October ‘22, production of blast furnace was ramped up to full capacity of 1.1 MTPA within 6 months of startup and the coke plant has been repaired and has started production in September 2023. A plan is being worked out for expansion from 1 MTPA to 4.8 MTPA,” Sitharaman observed. “Not only have the operations improved, the employees have also benefitted from the disinvestment. With disinvestment, the unpaid employee dues of Rs 387.08 crore were paid to them. So, all claims of Congress and Rahul Gandhi with respect to PSUs fall flat, as they are baseless,” the Finance Minister said.
Under the leadership of PM Modi, Sitharaman said, “PSUs are thriving, benefiting significantly from the culture of professionalism infused in them along with increased operational freedom. The focus on capital expenditure has also led to substantial growth in their stock performance,” said the Finance Minister. She also listed achievements like greater alignment of management incentives (through the sharpening of performance-linked incentives), capital management guidelines on dividends, buybacks, etc.
and the calibration of the disinvestment strategy which have helped improve the performance of the CPSEs and reposed investor confidence.
Drawing attention to the initiatives to help public sector banks (PSBs) to recover from the banking crisis created by the UPA, Sitharaman highlighted that GNPAs in PSBs have fallen to decadal lows of 3.2 per cent, profits are at record highs even as the push to financial inclusion brings formal banking to every corner of the country.
Sitharaman noted the transformation in PSUs under the Modi Government as evident from a comparison of parameters between FY 2022-23 and FY 2013-14. “Total paid-up capital of all CPSEs was Rs. 5.05 lakh crore as of 31 March, 2023, v/s Rs. 1.98 lakh crore in FY14, an increase of 155 per cent. Total gross revenue from the operations of CPSEs during FY 2023 was Rs. 37.90 lakh crore v/s Rs. 20.61 lakh crore in FY 14, an increase of 84 per cent and net profit of profit-making CPSEs stood at Rs. 2.41 lakh crore in FY 2023 v/s Rs. 1.29 lakh crore in FY14, an increase of 87 per cent,” Sitharaman elaborated.
She said that the contribution of all CPSEs to the xchequer by way of excise & customs duties, GST, corporate tax, dividends, etc. stood at Rs. 4.58 lakh crore in FY 2023 v/s Rs. 2.20 lakh crore in FY14, an increase of 108 per cent. While net worth of all CPSEs increased from Rs. 9.5 lakh crore as of 31 March, 2014, to Rs. 17.33 lakh crore as of FY-2023, an increase of 82 per cent, capital employed by all CPSEs was Rs. 38.16 lakh crore as of 31 March, 2023, against Rs. 17.44 lakh crore as of 31 March, 2014, a growth of 119 per cent.