Prime Minister Narendra Modi on Wednesday presented a strong case on privatizing the non-strategic PSUs, saying the government has administered full commitment to privatize the Public Sector Undertakings. (PSUs) The notion of privatization addresses the demand for uplifting the remote industries that have been stranded into staggering depth by the ignorance of the government reforms.
Addressing the issue of sickening industries, PM Modi’s comments came as a spectacle of hope to the local manufacturers that they can expect a ray of motivation from the democrats as well as the political reforms.
PM Modi reiterated that the government has “no business to be in business,” and stressed the fact that when the public sector looks to strengthen its reach, it often leads to losses. Emphasis was on making the country self-sufficient and improving the quality of production by giving the business opportunities to develop in remote areas. Developing small-scale industries is more crucial than uplifting the giant beasts of the market.
How compelling the economic position of a country depends on the connection of the small units with the big manufacturers. And if the streamlining process is disrupted the whole economy suffers a bewildering crisis.
The government also stressed working towards the mantra of “monetize or modernize” to benefit the citizens of India. As the democrats feel the power of running the business should be concentrated hands who have the potential of growth besides the dynamic nature of today’s global markets.
IS GOVERNMENT FEELING THE PRESSURE OF BEARING LOSSES NOW?
Saying the ship has sailed might be too extravagant concerning the government’s mindset, as they are now affirmative about their decision on monetizing and privatizing the Public Sector Undertaking(PSUs).
“When a government engages in business, it leads to losses. The government is bound by rules and the lack of courage to take bold commercial decisions,” addressing a webinar on privatization by the Department of Investment and Public Asset Management, said the Prime Minister on the eve of announcing a new step towards the revolution of Atma Nirbhar Bharat.
The sole motive of the Government is to take India to a high growth trajectory, but has the government converging with the fact that it no longer can sustain high profits for the country by executing business activities?
Questions arise from different media outlets that have the government finally lived up to the expectations of people or this step is just to reduce the mounting pressure of the unpromising strategies of the Government?
During the lockdown, every sector faced huge amounts of losses and had to engage with the adversities of a standard lifestyle. The government has always looked to put the blame on several factors for its inefficiency or delusional behavior. But shouldn’t the Government be open to criticism in doing so?
We are far away from reaching a particular stage in creating a brand reputation in our country in terms of business growth, but with the coordination of the Government and the Private sector, we can achieve things that other countries aspire of.
The Modi government may be embarking on what it has ideologically committed to the people through its election manifesto, and is it worth shifting all the burden to the private sectors in one flash, we need to think about it again!
HAS THE GOVERNMENT ALREADY PROVIDED ANY CLUE OF PRIVATIZING THE SECTORS EARLIER?
At a press conference in Chennai in early August 2019, Union Finance Minister Nirmala Sitharaman was quizzed by the Reserve Bank officials, that the banks were not transmitting the interest rate reductions announced by the Central bankers to the consumers.
When asked if they were doing that on their volition, she straight away backfired the statement that it was done partly due to the nudge of the Government, and the rest according to their terms.
Amid the consequences of the pandemic, the latest budget is a revelation of sorts. The government is now focusing on bearing the mark of the right movement’ and is no longer perplexed in sustaining the centrist stance.
For the first time ever, the “privatization” term has been used in a budget speech by the Finance Minister while revealing the annual budget of the financial year.
Nirmala Sitharaman through her announcement of privatizing two public sector banks has indicated what’s to come by and what could be the next revolutionary move of the Government for the citizens. This is by far the biggest announcement in recent years, as it purviews the way the industry is going to look forward in the upcoming weeks, months, or years.
The phenomenon of disinvestment has been consciously used in speeches or announcements. The revelation was done so that when and if the government decides to back off and sell its stake in public enterprises, it does not backlash onto them, affecting the working on the prominent matters of the country.
Look at the scenario around us, there would seem a lot of difference in the vision and efficiency of the working of the public sector than the private sector, as the public sector is more engaged in injecting their pockets rather than correcting the ailing problems.
Government encouraging more private banks to indulge in activities, has the situation changed following the announcement of the budget?
Is privatization the lone panacea for the ills of the Indian Banking Sector? Or there seem to be a hindrance in turning attention to the private banks? Let’s delve deep into both sides of the argument:
We can perceive the evidence from the fiasco at Yes Bank. The decision to push LIC for an IPO( Initial Public Offer) and the move to let foreign insurance avail 74% control in the insurance business further strengthens Narendra Modi’s regime that the government should not be in the business of doing business. As earlier stated, engaging in business administration has often dreaded Ransome losses for the economy.
It has reaffirmed the Government’s stance of pushing out of all non-strategic businesses and keeping minimal focus in ‘strategic business fields’.
The shift to the right movement is rolling out at a faster pace than expected, but whether privatization is the way ahead is still unknown. But what this does is prohibit Government interference into crucial matters of the organization, due to many obligations of following rules the enterprises lack the enthusiasm of prioritizing the business activities at first, rather they drive their concentration of indulging into political reforms more often than not.
The questions have arisen due to the mishappenings that have already occurred. Most of us were witnesses to the troubles at ICICI Bank, and in the not-so-distant-past, we have also foreseen the happenings at Lakshmi Vilas Bank and Dhanalakshmi Bank.
Reasons due to which there would be uncertainty in shifting the public sector units into private banks
Governance has been an issue for private as well as public sector companies. A mere change in the nameplate of the enterprise does not deliver high success or attain greater profits. Who can forget the fiasco at Satyam Computers, once an iconic name in the Indian software has now fallen into immense downfall?
The establishment of a bad bank reflects the keenness of cleaning up the books of the Indian Banking industry and becoming a go-to sector for the government to ask for help If any black swan events arise just like the Coronavirus pandemic.
The focal point of announcing the disinvestment
Although the government has made promises to deliver the needs of the citizens, nothing is better than doing it now in the wake of the epidemic.
The PM said the centers’ policy was either to monetize or modernize state-run units and added that the vision of Budget 2021 has motivated the Government to reach staggering heights with contemplating with the citizens.
“If the country needs the public sector, the role of the private sector is also as important…If India is of any use to humanity today, our private sector has had a big role in it,” PM Modi told the Lok Sabha,
Understanding the concept of Monetise or Modernize
The Public Sector Undertakings have been running down the clock for a long time, and even after working thick and thin for the benefit of India, it has lagged behind due to the inconsistency of work ethic in the governing system. The human tendency is such, if your work is getting done and you are getting paid, you don’t even bother the suffering people. Isn’t it such a nasty environment to live in already?
Monetising or Modernizing has become the need of the hour, along with involving more people into the industry and hence creating more job employments. PSUs have been working on the same rigid principles and approach for a long time, and there the situation of new creative thinking comes to light.
If the individuals are capable enough, then they should step forward and share their views on various aspects as every Indian citizen has the right to freedom of speech. Along with that, the exceptional efforts of the brightest minds should be rewarded with incentives, so that the circulation of the money goes through the market and more people can procure their investments into massive projects.
Thus raising the potential to become a brand value in exports of goods and services.
CONCLUSION
Wealth creation is a factor of utmost importance to the economy, as it enhances India’s prestige globally and makes India the top-notch market for foreign investors to purchase undertakings.
In the midst of the pandemic, the private sectors have raised eyebrows through their commendable work in boosting the fragile market into a growth-driven market.
The government has opted out in the governance of internal matters and works beyond the framework of the enterprise so that there is clarity and goal-driven activities are conducted to properly compel with the dynamic changes prevailing in the global markets.
PM Modi had a strong pitch that the government will pull out of non-strategic sectors and listed 18 strategic sectors, including banking, insurance, steel, fertilizer, petroleum, and defense equipment, where it would retain only a limited presence. Through privatization, one thing can be held certainly true that the work will be done according to the unity of actions, no misconduct and political interference will be enforced into the networking system of the public enterprises.
