PSUs need to firm up productivity, profitability to stay competitive: FM

Union finance minister Pranab Mukherjee has urged public sector undertakings (PSUs) to firm up their productivity and profitability to be able to remain competitive. Mukherjee was speaking at the India Pride Award function on Monday evening.

The award has been instituted by the Dainik Bhaskar Group to recognise PSU’s contribution to the economy.

“I believe, in the long run, raising productivity and increasing profitability will be the key for survival of all PSUs from the tough private sector competition. PSUs need to tap on new growth areas and remain competitive,” said Mukherjee.

Mukherjee pointed out that it was worth noticing that PSUs operating in industries such as coal, petroleum products, power generation, telecommunication services and fertilisers with a major market share or complete monopoly as in nuclear power generation, a decade ago, saw their share curtailed during the past few years.

“PSUs need to optimise use of their resources and capabilities to produce higher-value products and services that are in demand. They also need to bring these products and services to new markets. All PSUs need to continue to maintain their core strengths while remaining flexible and nimble to withstand any down turns and capitalise on new opportunities,” Mukherjee added.

Mukherjee commended the survival of the undertakings against a competitive private sector.

Fears and apprehensions of survival of public sector undertakings in the aftermath of globalisation and private sector competition have proved to be unfounded, he stressed.

In the post reform period, the turnover of the PSUs has grown nine times and cumulative net profit has seen more than 35 times spike. In 1951, the total investment in five Central Public Sector Enterprises (CPSEs) was merely `290 crore, whereas now there are about 246 CPSEs with a total investment of Rs5,28,951 crore.

The net profit of the profit making units in 2008-09 was Rs98,652 crore.

Highlighting the efforts taken by the government to provide a prop to the PSUs, Mukherjee said, “We have delegated more powers to the Boards of Navratna companies, implemented revised salaries for executives and have introduced innovative measures such as performance related pay.”