Why Indian Govt is selling stakes of PSUs?

India in her early days of independence followed socialism. India’s GDP from 1951 till 1991 (when India’s economy was liberalized) grew at a dismal rate of 3.5%. This slow rate of growth is called “Hindu Rate of Growth”. This is the time when India was bound with License Raj. After liberalization, India’s GDP started growing at a rate of 6-8% per annum.

People are getting angry these days when Govt. is selling stakes of so called PSUs. Now, let see how efficient the PSUs are in our country.

First comes in the list is BSNL. In the early days when VSNL introduced internet in 90s, to get an internet connection one had to wait 5-7 months. For a dial-up connection, people had to pay close to 1000 rupees per month. Then Hutchison Essar, Airtel and Reliance came with their own telecom network in early 2000s and that change the whole scenario. The telecom was penetrated within the mass with a much cheaper call and data rate.

As of June 2020, the biggest networks in mobile subscribers in India are-

  1. Reliance Jio Infocomm Ltd – 398.30 million
  2. Bharati Airtel Ltd – 322.55 million
  3. Vodafone Idea Ltd – 279.80 million
  4. Bharat Sanchar Nigam Ltd (BSNL) – 123.22 million

So one may think BSNL may be an exception. Let’s take into account India’s state owned airlines “Air India” and the private airlines. The poor service and recklessness is a common assumption for Air India. India is World’s 3rd largest civil aviation market with 341.05 million air-passenger travelled in FY20. IndiGo has 43% of that share whereas Air India is mere 11%. The similar story of poor customer experience can be found in almost all PSUs. The mindset of “Government job mila toh aish hi aish” is making almost every PSUs debt ridden.



 

 

 

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