Top 50 PSUs will take lead in building Aatmanirbhar Bharat

• In April 2018, there was a CPSE conclave wherein certain guiding principles were decided by the government. Working towards global strategic outreach, investment, R&D, increasing capital expenditure, profitability and efficiency, aligning with national priorities, increasing CSR were a few of them

• We aim to substantially increase and double if we could, the total capital expenditure of CPSEs that is presently around Rs 2 lakh crore

New Delhi: Aatmanirbhar Bharat has a very deep philosophy and one should not just try to understand this from dictionary meaning. We should try to understand this at a philosophical level, and then we would see it is as a policy thought as well and from the perspective of an implementation plan that is embedded in that policy. This philosophical thought is essentially not the same as 'self-reliance' that we used to refer to during the early 1950s or 1960s. Here we are talking of Aatmanirbhar Bharat in a broader term, as part of the global supply chain. Aatmanirbhar Bharat is about embedding oneself into the global supply chains and creating not just manufacturing hubs but value hubs. 

We want to create value and that too of a significant size through technology and R&D, innovation and designing of the product. There are examples of countries that undertake mass production of companies that do R&D, designing and innovation of the product in their parent country. All they do is get the mass production done in a closed quality control environment. So, not only do we have to become a manufacturing hub or a service hub, but we have to create very big increments in value which will happen through innovation, research and designing. 

The philosophy and the plan

Under the wide spectrum of Aatmanirbhar Bharat, India will produce more, design, innovate and undertake R&D in sectors like space, atomic energy, power, petroleum, manufacturing and MSMEs, which are interlinked to PSUs, and create jobs alongside. The mandate for CPSEs under the Aatmanirbhar Bharat initiative is to create exponential growth of core and strategic sectors and give Indian economy the support of developed infrastructure. These key strategic sectors are power, petroleum, defence manufacturing, railways, ports, highways, coal and mining and heavy engineering. So, as I mentioned above, Aatmanirbhar Bharat is about linking with global supply chains and creating not just manufacturing hubs but value hubs where we design, innovate, undertake mass-manufacture and create global companies. Both in public and private sector, we have many companies that are truly world-class, but we need to create more of them. Global strategic outreach is a substantial part of Aatmanirbhar Bharat. So we have to work on linking instrument of PSUs with the global supply chain.

The total GDP of the nation is Rs 2 lakh crore and PSUs' contribution towards it is of Rs 27 lakh crore in terms of turnover and Rs 5.5 lakh crore in terms of value.

The set-up

In April 2018, there was a CPSE conclave wherein certain guiding principles were decided by the government. Working towards global strategic outreach, investment, R&D, increasing capital expenditure, profitability and efficiency, aligning with national priorities, increasing CSR were a few of them. On the basis of these guiding principles, CPSEs decided their vision plan. Sectoral business plans are already in place. If we talk about the oil and gas sector, it was decided that we are moving towards promoting a gas-based economy. We are making heavy investment in the direction of gas pipelines, city-gas network and related infrastructure. So most of the public sector companies are extremely competitive, despite diversified risk factors, irrespective of whether you talk about their domestic operations or global. For example, IRCON, RITES, most of the petroleum sector companies have robust business overseas. Around 30 percent of the revenue of RITES comes from overseas operations.

Revitalising the economy

Our plan is to let the top 50 CPSEs, from where all the growth, almost 80 percent of the revenue is coming, run at full steam. Now, what does the government think about it? The government thinks that first, we need to look at the capital structure of the particular CPSE. If the debt-equity ratio is less than the industry norms and the balance-sheet allows, then we are asking them to borrow more with a well-defined business plan to increase capital expenditure. According to our estimates, we can borrow from Rs 12-15 lakh crore. We have also identified the sectors where there is more potential for growth. We have identified where our funding will come from. We have moved from a policy to a micro implementation plan which delves into specific details like which projects will be set-up in a particular strategic sector, what is the feasibility of the project, the investment involved and the horizon period and how much will the return be. Everything has been planned on paper. 

Doubling the capex

We aim to substantially increase and double if we could, the total capital expenditure of CPSEs that is presently around Rs 2 lakh crore. We have asked CPSEs to double the capex and expedite work towards achieving the volumes that they had planned on achieving two years down the line. The increase in capex has to be based on solid projects with thorough feasibility studies. CPSEs have always had these plans but they were planning to execute it in, let's say, two or five years' time. The CPSEs that are doing well in their balance sheets will have to take the role of the leadership on way to Aatmanirbhar Bharat. 
The other very important development is that the government is set to announce strategic sectors shortly where there will be no more than four PSUs. Private players, too, will be part of these strategic sectors. The idea is to increase competition and bring in much-awaited reforms in the public sector.

Monetisation of PSU assets

The monetisation of CPSEs' assets is one area which has to be revolutionised. Even though a lot of work is being done already, but more work needs to be undertaken and at a faster pace. Secondly, a lot of dormant assets of CPSEs that are not being used have to be put into the cycle. We have huge townships and huge land-banks that can be used for creating industrial parks or can be given to private players who are investing in the sector. Another obstacle that the government is working towards is ensuring smoother clearances. These clearances work more like hindrances sometimes because they take more time than what they ought to be taking. 

ALSO READ: Asset monetisation: PSU assets worth over Rs 100 crore to be monetised by DIPAM

Last but not the least, we have prepared a list of 100 PSUs that are operating at a marginal level. Our aim is to double the profit of these companies that are making profits. If we succeed in achieving that, PSUs' contribution in terms of value to India's GDP will increase manifold. 

I am very optimistic about the performance of PSUs in India. We have a huge fraternity and an ecosystem of growth that is going to propel India towards achieving the goal of becoming a manufacturing hub as well as a value-hub.

Kumar is an IAS officer who is currently serving as Secretary in the Department of Public Enterprises (DPE), Ministry of Heavy Industries and Public Enterprises. 

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