Tag Archives: PSUs

‘Government has no Business to be in Business’ – Modi

02 Thursday Oct 2014

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Prime Minister Modi has stated at Washington at the end of his US tour that the “Government has no business to be in business”.

It is not a new slogan. The Bajpai Government earlier used the same slogan in a different way stating that ” Business is not the business of the government.” And then government started privatising PSUs one after another like BALCO, ITC Hotels and so on.

But the original slogan have another owner. It is the World Bank, which mooted the slogan. Both NDA and UPA governments were only repeating what the World Bank has told.

The PSUs have always been a thorn in the eyes of the private sector and the world financial institutions, since they put barriers in the maximisation of profits by the MNCs and big business. The Modi Government wants to remove this barrier by privatising the PSUs. Since the NDA government has got brutal majority, it feels that it can do this easily.

But the democratic forces will not allow such a thing to happen. The Trade unions in the country will also not allow such demolition of PSUs. The workers have to be vigilant and prepared for united struggles to save the PSUs.

50,000 toilets in schools will constructed by PSUs

01 Wednesday Oct 2014

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Coal India limited and ONGC together will be constructing about 5,000 toilets in the schools during the next few years. As per the reports, the expenses will be met from their social security funds.

Both UPA and NDA governments took action to disinvest, dismantle and privatise the PSUs. But it is the same PSUs which had helped the government in all crises. Whenever there is any financial difficulty, the government took the cash balance of the PSUs. How many times this process has been repeated? But at the same time, the attack on PSUs continues. All know that it was the PSU banks which helped the government to minimise the damage of the 2008 recession in India. The PSUs are the hens laying the golden eggs. Don’t kill them for immediate benefit.

Huge Disinvestment proposal in Budget ?

06 Sunday Jul 2014

Posted by in General, Neo-liberal policy, PSU

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It is reported by Times of India that NDA government will seek to raise up to a record $11.7 billion in asset sales in its maiden Budget this week.
The privatization target could reach 700 billion rupees, almost equal to all proceeds over the last four years, in the new Budget going to be presented in the Parliament this week.

If this is true, then many PSUs will be disinvested and some of them may have strategical partners also, which means, gradually the PSUs will be handed over to private companies as in the case of VSNL, Centaur Hotels, BALCO etc., which was done during the last NDA government.

The government can expect mighty struggles from the workers and their unions.

More disinvestment of PSUs in the pipeline

27 Friday Jun 2014

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The Modi Government has started it disinvestment spree. It is going to start disinvestment of shares of at least 8-9 PSUs in the near future. The proposal is to increase the sale of shares in the PSUs which are already disinvested up to 10%. This will be increased to 25%. Disinvestment of other PSUs also will be considered.

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.

Private Telecom Companies oppose proposal to mandate government connections for BSNL, MTNL

14 Tuesday Jan 2014

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The Cellular Operators Association of India (COAI), the organisation of the private GSM Operators has opposed the proposal of the GoM on Revival of BSNL, MTNL to mandate the Central and State Governments and their PSUs to compulsorily use the PSU telephones.
There is no logic in their opposition. The private companies are continuously seeking all kinds of relaxation whether it is on tax, licence charges or revenue sharing. In addition, they manipulate the accounts to pay less to the government. A large number of cases are pending in this way. They want all benefits, but they oppose even a small benefit for the telecom PSUs.
The Government should immediately take decision on the proposal of the GoM and make it compulsory for all the Governments and PSUs compulsorily take the BSNL MTNL telephones and telecom services for their use.

PSUs being harassed by the Government

12 Sunday Jan 2014

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Unable to meet the Disinvestment target of Rs.40,000 crore this financial year, the government has started harassing the PSUs to somehow get the money from them. Disinvestment in coal could not take place due to the strong opposition from the workers. Now the disinvestment in IOC also could not take place.
In this situation, the government is asking all the cash rich PSUs to provide funds to the government either through disinvestment, ross-holding or special dividend.
This has been what happened to BSNL also. The government took away all the cash through Spectrum charges, notional loan, interest and so on. Now BSNL is not having funds to expand and even to pay the wages of the employees. The government wants all the PSUs to reach that position so that privatisation will be easy and the corporates and big business can maximise their profits.

Disinvestment of PSUs in a new Avatar

11 Saturday Jan 2014

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The UPA II Government in its last phase of rule, with only a few months left for general elections is moving for a new method of disinvestment. Due to strong opposition from the unions, the government has not been able to disinvest in some of the rich PSUs.Only Rs.3,000 crore could be mopped up disinvestment so far, although the target was Rs.40,000 crore. Now without direct disinvestment, the shares are being diverted to the market for exchange etc. Just before the elections, the government want to satisfy the corporates from which about 70% of the election fund is mopped up. This new decision should be completely opposed.

The report published in the Business Line is reproduced here for more details.

ETF of PSUs set for launch in a month

NEW DELHI, JAN 10:
Soon investors can boast of a portfolio consisting of shares of 11 blue-chip Central Public Sector Enterprises without any risk considerations. An empowered Group of Ministers (eGoM) under the chairmanship of Finance Minister P. Chidambaram has approved the composition of the Central Public Sector Enterprises Exchange Traded Fund (CPSE-ETF).

Alternative

This fund will be used as an alternative to direct share sales of CPSEs. It will be listed on a stock exchange and trade like other shares on the bourse. Here, investors get the benefit of the constituent shares without directly owning it. Shares of companies, such as ONGC, Coal India, IndianOil and GAIL, would be among those that constitute the fund. Goldman Sachs has been assigned to manage the fund.

“It will be an open-ended scheme,” Disinvestment Secretary Ravi Mathur told reporters after the eGoM meeting here on Friday.

Mathur said a draft prospectus will be filed with the market regulator Securities and Exchange Board of India shortly. Once the approval is obtained, the scheme will be launched.

Difficult time

The fund is being launched at a time when the Government is struggling to meet the disinvestment target of Rs 40,000 crore. Till now, it has mopped up less than Rs 3,000 crore.

The Disinvestment Secretary did not provide any direct answer on the target shortfall, but said he hoped the companies that are not being divested will give special dividends. For example, Coal India has called a board meeting next week to take a call on dividend. Coal India was originally listed for disinvestment, but strong opposition from the unions forced the Government to back off. (Courtesy : Business Line)

(This article was published on January 10, 2014)
Keywords: Empowered group of ministers okays PSU exchange-traded fund, Coal India, CIL to be part of exchange-traded fund, 11 companies to be part of exchange-traded fund, PSU exchange-traded fund to raise Rs 3, 000 cr, Disinvestment Secretary Ravi Mathur, Central Public Sector Enterprises Exchange Traded Fund

5% stakes of BHEL may be bought by other PSUs

05 Sunday Jan 2014

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In order to mop up funds to deal with the financial deficit, the Central Government is pressurising the cash rich PSUs to purchase shares of other PSUs. The disinvest programme projected to get about Rs.40,000 crore becoming a failure, the government has found out this new method.
It is now reported that other PSUs have shown interested in purchasing the 5% stakes of BHEL. This money will be used by the government for managing its financial deficit.

No CMDs for 11 Central PSUs – a method of destabilisation?

23 Tuesday Jul 2013

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There are at least 11 Central PSUs which have no CMD for a long period. They are NFL, NHPC,STC, Pawan Hans, NALCO, SCI, BHEL, RINL, IRCTC, BEL and GSL. In many other PSUs about 50 or so, posts of Directors are also vacant without being filled up.

It is reported in the media that most of these posts ar not filled up due to the delay for approval from the cabinet Committee, which consists of Prime Minister, Home minister and the Minister in-charge of the concerned PSU.

Of course, the government wants to destabilise and make the PSUs unviable as part of the neo-liberal policy. This is one method to ensure that the PSUs do not function properly.