Friday, June 24, 2022

FM tells PSUs to cut overhead costs wherever possible to compete with private sector

Nirmala Sitharaman has asked PSUs to improve efficiency, professionalism and cut down the overhead cost wherever possible to compete with the private sector

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  • Sitharaman also urged PSUs to seek private sector participation wherever possible to make use of their advanced technologies and expertise
  • Referring to the new PSE policy announced in 2021, the Finance Minister said PSEs need to be aware of the competition they will face from the private sector

Gandhinagar: Inaugurating the Department of Public Enterprises’ (DPE) #AKAM (Azadi ka Amrit Mahotsav) mega show in Gandhinagar, Union Finance Minister Nirmala Sitharaman asked PSUs to improve efficiency, professionalism and cut down the overhead cost wherever possible to compete with the private sector. The minister was addressing the heads of PSUs at Mahatma Mandir in Gandhinagar on Thursday after inaugurating a mega exhibition on the contribution of these government-owned companies to nation-building as part of the Azadi Ka Amrit Mahotsav celebrations.

#AKAM: FM asks PSUs to seek private sector participation

Sitharaman also urged PSUs to seek private sector participation wherever possible to make use of their advanced technologies and expertise in areas where the public sector lags behinds. “It is now time for PSEs to show that you are very keen to improve on your professionalism as much as you have done between Independence and the 1990s. And wherever possible, in order to bring down the overheads, it might be worth looking at private participation together with what you are doing…you can benefit from the efficiency of the private sector,” said the minister.

PSUs must brace for stiff competition from private sector

Referring to the new PSE policy announced in 2021, the Finance Minister said PSEs need to be aware of the competition they will face from the private sector for whom the government has opened the strategic sectors.

“The policy has opened up sectors, that were earlier reserved for PSUs, for private companies to operate, and therefore, I would raise a flag here to all the PSEs. The moment you are opening up sectors for private participation, we in the public sector will have to be conscious of the level of competition which is going to be before us,” she said.

“And if we are conscious of the level of competition, I am sure, just like you have done in the past for several decades, you will face the challenge, and also be able to stand up, and through better efficiency, be on the top rather than leave the space,” Sitharaman said.

1991 reforms game-changer: FM

She termed the economic reforms, which were introduced in the country in 1991, a “game-changer.”

“With India opening up after 1991, PSEs started competing with the private sector entities. That was a game-changer as the PSEs realised that now they will have to improve on their efficiencies, also scale up and reduce the overheads,” the minister said.

The exhibition titled “Nation Building and CPSEs” is seeing participation from 75 PSUs, such as Coal India, GAIL India, NTPC, Steel Authority of India Ltd (SAIL) and Indian Oil Corporation Ltd (IOCL), among others. The exhibition will be open to the public from June 10 to 12.

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