Category Archives: PSU

No Immediate Privatisation of Air India – Minister

30 Friday May 2014

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NEW DELHI: Aviation Minister Ashok Gajapathi Raju Pusapati has stated that the public sector does have a place in the overall growth of airlines industry, suggesting that he is against the government exiting the running of national carrier Air India despite its huge losses and debt.

“Just because a company belongs to the public sector, one should not be against it. But it has to perform,” said the Minister. (Courtesy : ET).

So at least immediately, there is no plan for privatisation of Air India by the NDA Government.

SBI Sells NPA of Rs. 3,590 Crores

26 Monday May 2014

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Amidst severe criticism about the increasing bad loans of PSU Banks, SBI has sold Rs. 3,590 crores NPA (Non-Performing Assets – bad loans) to Asset Reconstruction Companies (ARC). These include mainly security bonds as also a small part of about Rs. 241 crores. Another Rs. 1,892 crores loans have been written off.

There are certain important issues connected with the NPA or bad loans. Most of the NPA are due from corporates and big business. it can be said that there are very few companies including the big corporates who are not in the list of defaulters. No serious action is taken by the banks for collection of the same and later they are written off. But the banks are very strict with the small creditors from whom they collect the loans with mighty efficiency. Of course the banks may be reluctant to annoy the big guns. Secondly they may have illegal connections with the big corporates in one way or other.

The Bank Employees’ Associations and Unions have been focussing these points and demanding the managements to strictly collect the loans from the biggies.

Move for FDI in Railways

24 Saturday May 2014

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The proposal for 100% FDI in Railways, which was prepared at the time of the UPA II government, is reported to be presented to the new government by the Ministry of Commerce and Industry. The FDI will be in high speed train systems, suburban corridors, high speed tracks and freight lines connecting port and mines. It is to be noted that these are the sections from which Railways get much revenue. Here also the UPA II government’s policy of gifting the Corporates the profitable side and retaining with the government the losing side is in clear evidence.

There is no need for FDI in Railways and it should be completely opposed.

Disinvest Department Recommends strategic sale of PSUs

23 Friday May 2014

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While most of the departments of the government are sluggish in taking decisions on the governance of the country, there is a particular department which seems to be working round the clock. It is nothing else than the Disinvestment Department. During the earlier NDA government it was a ministry itself, but was downgraded to a department after the UPA I government took over.

Disinvestment was at very low pace in the UPA I since it was sustaining itself with the support of the left Parties,which strongly opposed disinvestment of PSUs. The UPA II wanted to speed up disinvestment, but could not move much due to various reasons. Its target of enriching the exchequer through sales of PSU shares could not be reached.

Now that the NDA with huge majority is taking over the government, the Disinvestment department will be feeling that it is the right time to directly sell the PSUs, instead of piecemeal. The sale of PSUs to strategic partners ( as in the the case of VSNL to Tata Telecommunications) they want to pursue now.

Accordingly, the Disinvestment Department has recommended to the new government for strategic sale of PSUs in the non-core PSUs like Cement, Steel, Textiles, petrochemical, fertiliser etc., which may also be extended to core PSUs later.

What will be the decision of the new government is not known.But there is real danger to the existence of the Public Sector. The Public Sector banks, which have stalled the recession in India to a certain extend is under severe attack. State Bank activities are already outsourced to Reliance company. The corporates and India Inc have demanded privatisation of the nationalised banks.

The working class under the Central trade Unions will have to seriously consider these issues and pressurise the new government from proceeding in the above matter, failing which mighty struggles should erupt to stop this selling of the national assets.

Bank Employees on Struggle Path – Dharna on 23rd May against Disinvestment of banks

20 Tuesday May 2014

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Associations of the Bank Employees have decided to organise Protest demonstrations on 23rd May 2014, protesting against the recommendations of the Nayak Committee proposing reduction of government in PSU Banks to 50%, transferring ownership to “Bank Investment Company”, repeal of the Bank Nationalisation Act and SBI Act, bringing banks under the companies Act etc. These will completely destroy the PSU banks and in fact will result in virtual privatisation of PSU banks.

The Bank Employees Association has taken the correct decision to oppose these recommendations and resort to agitational programme. We fully support and extend solidarity to the agitation. We also demand the Government to completely reject these negative recommendations.

Ernakulam Bandh today to ‘SAVE FACT’.

12 Monday May 2014

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Fertilisers and Chemicals Travancore (FACT) is the major Public Sector Company in Kerala, which produces fertilisers and chemicals like ammonium. The FACT was started in 1943 by the Maharaja of Cochin, but later converted to PSU. This was giving sterling performance for many years. But due to the neo-liberal policies being implemented by the Central as well as the present UDF government in Kerala, the company is in loss and is in a critical situation.

A “Save FACT Action Committee” formed to rejuvenate the FACT, including all trade unions and political parties. The Committee has called for a Bandh today at Ernakulam and the same has been fully successful.

The Central and state Governments should immediately take necessary action to save the FACT and make it a profitable company as before.

 

 

Bank Employees Unions Protest SBI- Reliance Agreement

02 Friday May 2014

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The Bank Employees Federation of India (BEFI) has strongly protested the SBI-Reliance agreement, according to which most of the banking functions of the SBI is being handed over to the Reliance and also 50% or so of the profit also.
The agreement has been signed weeks back very secretly and has come out in the open two days back only. According to the agreement, the take over will be done with retrospective effect from last year.
If the agreement is implemented, many employees in SBI will become surplus. Retrenchment through VRS is sure to come. Reliance will not function the branches, where there is no profit. The UPA government has taken the decision and implemented the same in the last phase of the government even without taking the Parliament into confidence, only to hand over the PSU to the private company.
We fully support the struggle of the SBI employees against the anti-worker anti-people agreement. Not only the workers, but the common people should also protest and save the SBI, one of the best PSUs in the country.

LIC Towers Over Private Insurance Companies

02 Friday May 2014

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Once again LIC has kept its top position. The latest figures show that despite high publicity and hype, the private insurance companies are still far behind the Life Insurance Corporation of India in all respects.

Look to the statistics:

LIC have 72.7% Market Share with all the private companies, about 23, sharing the rest. The biggest of them, ICICI Prudential, has got only a meagre 4.7%. In fact, LIC added 2% more market share in the last two years from the private sector.There are only 6 private companies which have more than 2% market share.
Out of the more than 34 crore policies in force in 2012-13, more than 29 crore are from LIC alone.
LIC has got more than 11.72 lakh field agents, while all the private players together has got only 9.49 lakhs.
The satisfaction level of the LIC claim settlements are almost 97%, while that of the private companies are far-far below.

But the most interesting factor is that LIC is having less profit compared to its next rival ICICI Prudential. ICICI has posted a profit of Rs. 1,496 crores in 2012-13, while LIC had only Rs. 1,437 crores. The reasons are well known. The charges are less for LIC, settlement of claims are better and of course, as a PSU, it has to pay heavy dividends to the Government. (Courtesy Business Line for the statistics)

Congratulations to the LIC Management, agents and the workers who have ensured through their joint efforts and sheer dedicated service the growth of LIC. Congratulations to the All India Insurance Employees Union (AIIEA), the only major union in the LIC, which through its sustained struggles have ensured that the LIC continues as a PSU and is not decimated by the private companies.

State Bank Attacked, Most works being hand over to Reliance Company

30 Wednesday Apr 2014

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The papers have reported a shocking news ! An agreement is made between the Public Sector State Bank of India and the big corporate Reliance Money Infra,an Anil Ambani Company, through which most of the works of SBI are being transferred / outsourced to the latter. Although the agreement is signed on 25th February 2014, it is with retrospective effect from 5th October 2013. It is unbelievable.

SBI is one of the best run Public Sector Bank with good profit and with a best customer service. Its service is appreciated much. I have my own experience to that. Then why the services of the SBI are being handed over to a private corporates whose credentials are doubtful.

Is it because that the reliance could not get the licence to start a bank, that the government is making this gift to Reliance? Is it because not to recruit more employees to SBI? Or is it to maximise profit for Reliance? And this agreement is reported to have been made more than one month earlier, but with out any publicity. No discussion in the Parliament, no debate in the country, every move was secret. Even otherwise is it ethical to take such a decision when a new government is going to come and the General elections are going on.

The ruling UPA government owes an explanation to the people of this country for such an unwanted and hasty decision. I am sure the Bank workers and for that matter the Central and other trade unions will strongly react to this anti-people decision.

CAG will restart auditing of priavte telecom companies – a most welcome step

19 Saturday Apr 2014

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The decision of the Supreme Court allowing CAG audit of private companies is most welcome. It will expose the role of the private telecom companies which have been cheating the government of its revenue share by manipulating its accounts by showing less revenue to avoid payment of revenue share to Government. The earlier audit of a few companies have shown the cheating and penalties were imposed on them.This process was stopped after the private telcos went to the court and obtained stay. Now the stay is removed and CAG has been allowed to audit.

A detailed report on the matter published in Times of India is reproduced below:

NEW DELHI: Special teams of the Comptroller and Auditor General of India could soon be fanning out across the country to begin audit of private telecom companies in the wake of Supreme Court’s landmark order of Thursday.

While upholding CAG’s right to audit private telecom companies on Thursday, the apex court said : “When nation’s wealth, like spectrum, is being dealt with either by the Union, state or its instrumentalities or even the private parties, like service providers, they are accountable to the people and to Parliament.”

According to sources, the first results of CAG’s audit could be available within a year, since the audit body had been ready since 2010 to audit private telecom companies that give a part of their revenue to the Centre.

The audit could open up not only significant revenue for the government, but also raise questions over accounting and reporting standards of some private telecom firms. CAG had started auditing telecoms a few years ago, but the exercise got stalled when the private companies moved court.

The Delhi High Court allowed the audit in an order in January this year, but the telcos moved apex court challenging the order.

Private auditors appointed by the department of telecommunications had audited five telecom companies in the financial years 2006-07 and 2007-08. The five leading operators together understated their revenues by Rs 10,268 crore during these two years, the audit found. Based on the findings of the audit in mid-2012, DoT had slapped penalties totaling Rs 1,594 crore on the five companies.

Under the contract between DoT and telecom companies, the private entities pay 6%-10% of annual revenue as licence fee and 2%-6% as spectrum usage charges. Under-reporting of revenues would have significant adverse impact on the revenues accrued to the government.

It was at the request of telecom companies that the then NDA government, headed by Atal Bihari Vajpayee, allowed telecoms to migrate from a fixed licence fee regime to a revenue sharing one in 1999. This was provided through the New Telecom Policy of 1999.

However, when the government discovered variation in the gross revenue of certain operators as reported to the DoT, the Securities and Exchange Board of India (Sebi) and the Telecom Regulatory Authority of India (Trai), it ordered special CAG audit into books of their accounts.

Starting October 2009, the CAG began efforts to audit the private telecom companies. And, for the past three years it has also been asking DoT to nominate CAG as its auditor under the agreement between the government and the companies. However, the DoT has been reluctant about nominating CAG, while private telecom firms went to court.