Educational technology ,careers and future : Why India require PSU's

Monday, February 18, 2019

Why India require PSU's

While India is progressing rapidly with the evolution of technology .Number of  companies are investing in India looking at huge customer base available in India . But the question is ,what is the significance of BSNL and other large PSU's working in India?

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Answer is large PSU's like BSNL are very significant in context of India. As you are aware that India is a mixed economy where Public sector companies contributes to the economy along with the private companies. While private companies are rider for the new technological advancement ,they really fail to provide financial security to sufficient people. Financial security not only to its regular employees but to all the people working for the companies. There are various factors deciding importance of Public sector units in India.


Due to fierce competition in Every field ,cost saving is always a challenge for a company. When competition is to provide service and products at cheap rates first thing which a company targets to reduce expenditure is expenditure on HR . Now a days most of the companies are outsourcing major workforce .Only 10-20% strength of employees are hired as regular employee, rest are engaged on contract .This contractual workforce are engaged on very low cost compared to regular employees and becomes unemployed whenever demands goes down. 

While on the other hand PSU's has their sanctioned strength of employees which far more compared to private companies .It can be understood easily by comparing employee strength of BSNL ,with other private operators. BSNL employs around 175000 people, while total employee strength of Airtel , Vodafone, Idea and RJIO  combined is nearly 50000 less than 1/3 rd of BSNL . 


Although most of the Indians think that they doesn't require PSU's while there are number of private companies to provide quality products and services .But these PSU's plays very crucial role to fulfill social obligations  when all private companies fail to. 

You can go back to year 2008 when sudden surge was observed in crude oil prices ,crude oil price reached upto 94 $ per barrel due to losses , Reliance industries shut down all its petrol pumps nationwide to curb losses and only restarted after March 2016 when crude oil reached approx 41$ per barrel. Only Public sector Oil companies were there to give respite to common man from soaring oil prices.

Similarly in the time of natural disaster BSNL being a Public sector operator and huge workforce always remains at forefront to provide uninterrupted services which was already observed during cyclone in Andhra pradesh,Kerala Floods,kedarnath floods. BSNL provides services in non profitable areas covering  from Leh-Ladakh to Kanyakumari and upto far-flung areas of north east.


All public sector companies contributes to Indian economy upto great extent .That is one reason why India absorbs various shocks of worldwide recession.


This is very common question in the minds of every taxpayer that why tax paid by him is utilised for providing bail-out packages to PSU's to compensate for losses and question is genuine. But stopping bail-out to PSU's and let them die is not the solution. As it will not only create unemployment but also left Government with no options to fulfill its commitment towards social obligations in critical situations.

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  •  Rather  Government should  review  the  future of every PSU in next 20-30 years ,then only any action should be taken.There are various reasons for failure of any PSU which must be looked into for their revival.
  •  Although PSU's are established under companies act 1956 but they still function very much like Government organisation, what is the biggest hurdle for these PSU to earn profits. 
  • Decision making and implementation in PSU's is very slow. Due to corruption and malpractices at various levels, quality of service is very poor compared to private organisations.It can be understood by the fact that 4G is launched in India in 2016 but Government owned BSNL is still waiting for the spectrum for 4G after 3 yrs. while private companies are working on their network for 5G upgrade state owned telco is still not clear about its 4G spectrum ultimately affecting its business.
  • Recruitment by the PSU's are done in large numbers but they are really not bothered about upgrading employees with the changing technology and skills, thats why after some time efficiency of the employees degrades .

  • Accountability

Usually accountability is not fixed in many  PSU's. Higher authorities always try to avoid responsibility for any big decision . Whoever is assigned responsibility are deprived of sufficient powers.Thus causing frustration among hardworking and capable employees at various levels.

  • Dependence on Government

For making any big decision these PSU's are totally dependent of Government and it is difficult to make independent decision without interference. 

Public sector Units are very crucial for a nation like India to maintain the stability of the economy and to deal with emergency situations like natural disaster ,recession and war like situations. The only thing what is required is restructuring of PSU's in line with the private organisations and long term vision .

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