BACKGROUND: PRE INDEPENDENCE STATUS AND POST INDEPENDENCE PHILOSOPHY THE GOVERNMENT INTERFACE
Department of Heavy Industry
Department of Public Enterprises
EVOLUTION OF PUBLIC SECTOR POLICY IN INDIA
1947-1991: Growth of PSEs
1991 Onwards: Decline of Public Investment and Disinvestment Present Public Sector Policy of the Government
PERFORMANCE OF STATE-OWNED ENTERPRISES IN INDIA
Salient Trends In PSEs
Rise In Per Capita Emoluments
Capital expenditure increases in public sector
Decline In MoU Rating
Summary Performance 2008-09
ISSUES AND CHALLENGES BEING FACED BY CPSES
Key Issues Affecting Performance
"The State will progressively assume predominance and direct responsibility for setting up new industrial undertakings and for developing transport facilities." -Industrial Policy Resolution 1956.
At time of India’s independence the architects who were taking on journey of restoring India to its formers heights of glory believed that the only way to move forward for the country was to move in the Socialist pattern of self reliance. This direction which is also called the Nehruvian model based itself on the theory of the state’s responsibility to set up industrial undertakings and assume the role of leader in the industrialisation process. This was the genesis of the emergence of State owned enterprises. The Industrial Policy Resolution of 1948 was the first step in the process and thereon it has been a constant process of the state.
More than 60 years on the story is now reaching an important milestone where in the state is now trying to restrict itself to the least required. In this assignment I shall endeavour to highlight the evolution of the PSE’s in India and the major policies which have been the creator of this sector. I shall then look at the Government’s machinery which is responsible for the coordination and management of the Public Sector in India. I shall also talk about the performances of PSE’s post reform process.
Let us briefly look at the objectives that are looked at for setting up PSE’s The objectives of public sector enterprises may be divided into three categories:
i. Economic development - Public enterprises are established to accelerate the rate or economic growth, by setting up key and basic industries like iron and steel, petroleum, power generation, chemicals, machine building, etc. The public sector provides an essential base for faster economic growth of the country. Expansion of capital goods industries lead to the development of other industries.
ii. Planned growth - The private sector neglects the industries with long gestation periods and low rate of returns. Public enterprises step in to fill up gaps in the industrial structure by setting up industries which are economically unattractive, but nationally essential. Public sector provides infrastructural facilities for diversified and balanced growth.
iii. Balanced regional development - Public sector concerns are designed to facilitate the growth of backward regions so as to reduce regional disparities in industrial growth.
iv. Generation of surplus - Public enterprises are expected to generate and distribute surplus for financing five-year plans and other schemes of public welfare.
v. Provide employment - One of the important objectives of public enterprises is to reduce the unemployment by creating employment opportunities.
2. Social objectives
i. Control monopoly - Sometimes, public enterprises seek to check private monopoly and restrictive practices and the resulting evils like exploitation.
ii. Equitable distribution of wealth - Public enterprises are expected to reduce disparities in the distribution of income and wealth. Reduction of economic disparities is one of the objectives of our constitution and public enterprises are helpful in checking concentration of economic...