21 SEP,2020 | MEDC
Many of India’s public sector enterprises (PSEs) have become white elephants. The share of PSEs in India’s total market capitalization fell to a decadal low of 4.6% in June 2020 compared to 13.71% in June 2010. These companies no longer figure in the list of India’s top 10 stocks by market cap. This obviously impacts disinvestment. Loss-making PSEs should be swiftly wound up, and the word strategic redefined. After all, the economy is a dynamic entity, constantly changing over time. From the PSEs perspective, strategic would mean essential for the economy’s long term competitiveness, and beyond the competence/interest of the private sector. New strategic sectors have emerged in microelectronics, communications, material science and synthetic biology for which the private sector shows little appetite, but which are essential for boosting national economic competitiveness. This is precisely where new Indian PSEs need to entrench themselves, with full government support and insulation from all kinds of political and administrative interference.
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