PSUs-A boon or brunt?

There has been an endless debate on whether PSUs today serve the purpose for which they were formed-serving the public. Recently I read an article in Business World criticizing Nehru for building these "flawed" temples of modern India. I beg to differ in this. The author argues that Nehruvian philosophy of serving the public with the profits from PSU has led to this sorry state that most of them find themselves in. It is true that they have degraded in stature and value, but it is we who are to blame for having let things go haywire, not the system in itself. At that time, of independence, one must remember, no individual or industrialist had the financial muscle to build what the government built. The only forces which could have afforded the Air India or IOC, for instance would have come from foreign nations and we would have successfully freed ourselves from one rule and landed in another-an even more sinister one-for our entire economy would have been controlled by these forces. So Nehru's vision was right-the implementation probably got screwed up somewhere along the way.



It is definitely true that there has been a severe degradation in the quality of service and products that these PSUs have churned out and I strongly beleive that the few which are doing well are doing so just because of the fact that they have been there forever. Take BSNL for example. People were amazed at the number of cellphone customers they were able garner within the first few months when compared to Airtel which has been a player for a long time. But think of the backbone that BSNL has. When BSNL enters the market with that kind of a customer base (in landline ofcourse-but they are more than willing to become mobile) and that kind of an all-India presence, I would say "Kudos Airtel, for staying in business." and they have continued to do really well after all.



On the other hand there are really sick PSUs which are (forgive me for the analogy but couldn't resist it;) nothing but sacks of money thrown into the fireplace, never to be seen again-no value addition to the economy except for the fact that the people who work in these places make a decent living out of it. Allow me to digress a little here...what makes these PSUs fail miserably inspite of the funds that flow in almost ceaselessly? Well the answer lies in the question there...ceaseless flow...of funds, of life, a security beyond doubt. When a private company becomes complacent, it goes out of business, crushed by the market to preserve the sanctimonious law of survival of the fittest. Well, PSUs,? I will say no further. But one thing is true for sure-No economy can expect to grow by going against the laws of nature and economics and we have been desparately trying to disprove that for 55 years.



Now all that might have appeared to be a scathing decree against PSUs. But it is not. Infact this leads to a very interesting scenario. On one end of the spectrum we have PSUs like LIC and BSNL which have been doing extremely well despite entry of competetion. On this end we have...well you know what. Now what would a keen businessman do in this situation-continue burning money on one end compromising the little value that was gained on the other-Never. Lets rise above political compulsions and sell off the sick ones. Yes, you read it right-sell off every sick unit and let the rest go back to the rightful owners-the public. Lets disinvest the profit-making PSUs not by selling it to foriegn buyers, but by selling it back to the public. The government should be a minority shareholder (it is still going to be the biggest shareholder anyway;). Let there be an impartial board which oversees that the right things happen and over time, these might turn out to be the most valuable assets the government ever parted with the public..



It is high time the government got back to its business,which is framing laws and serving people's needs and not running companies-India has got enough businessmen to do that.



Any comments on this will be highly appreciated.