Competition between Private and Public Sectors
Finance Minister Arun Jaitley admitted that ‘chaining of the public
sector to the legal regime’ affects their performance. It was clear that he was
referring to Hindustan Aeronautics not being selected as partner in the
multi-crore Rafale fighter-jet deal. In place of Central Public Sector
Enterprise HAL, a company from private sector Reliance Defence was selected as
partner in the offset deal by the French Aircraft manufacturer Dassault
Aviation which triggered a huge political controversy. Jaitley was hopeful that
with accelerating pace of reforms, things would change and that would benefit
public sector companies.
What happens if the political funding by private companies is completely
stopped? The real solution is to stop bribing in the name of donation to
political party. Then we will be able to see how efficiently private sector
works.
Public sector can compete with private sector when they increase their
operational flexibilities for maintaining their liquidity and profitability and
strict chaining of them indeed to be removed and autonomy granted to the
required level. In spite of the stiff competition from giant Tele operators
like gio airtel, Vodafone etc, BSNL the Central Government corporation still
exists and it shows that even public sector could compete.
It is true that there is a vicious circle. Certain activities should be
reserved for public sector and other activities should be reserved for private
sector. There should be no overlap. If accountability is enforced, any public
sector firm will give the private sector a run for its money.
Time for Public Sector was over by 1960s. Freedom struggle, nationalist
spirit - all forgotten and given a burial once Gandhis took over the country and
the Congress was reduced to a tool in the family's hands to implement the only
agenda...keep them in power. Nepotism, lethargy, unionism, politicization,
rampant corruption, low or no work ethics.... all these characterizes PSUs
today. They are given birth to by politicians and bureaucrats.
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