Public Sector Enterprise Policy for a New, Self-reliance India

• India and the world have changed in the last few decades
• Need for a new coherent policy—where all sectors are open to the private sector while public sector enterprises (PSEs) will play an important role in defined areas. Banking to be a Strategic Sector hints CEA Subramanian
• Accordingly government will announce a new policy whereby

  • List of strategic sectors requiring presence of PSEs also be allowed in public interest will be notified
  • In Strategic sectors at least one enterprise will remain in the public sector but private sector will also be allowed
  • In other sectors, PSEs will be privatized (timing to be based on feasibility etc.)
  • To Minimizec wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatized/ merged/ brought under holding.

STRATEGIC VS NON-STRATEGIC

Earlier, the strategic sectors were defined on the basis of industrial policy.

  • Industrial Policy Resolution,
  • 1948 Industrial Policy Resolution, 1956 (IPR 1956)
  • Industrial Policy Statement, 1977
  • Industrial Policy Statement, 1980
  • New Industrial Policy, 1991

Government classified Central Public Sector Enterprises (CPSEs) as ‘strategic’ and ‘non-strategic’ on the basis of industrial policy that keeps on changing from time-to-time.

According to this, the Strategic sector PSUs were:-

1.Arms & Ammunition of defence equipment

2.Defense aircraft & warships

3.Atomic energy

4.Applications of radiation to agriculture, medicine

5. Railways
All other Public sector undertakings (PSUs) other than the strategic sectors fall under Non-strategic Sector including-
Insurance, mining, Power Distribution Companies, Discoms etc.

The government will soon frame a new Public Sector Enterprises Policy(PSE).
The new Public Sector Enterprises (PSE) Policy will categorise the sectors as Strategic and Non-Strategic ones.

The total number of Public sector undertakings (PSUs) in strategic sectors will be at least one and a maximum of four.
The rest of the PSUs in non-strategic sectors will be either privatised or merged.

Banking to be a Strategic Sector hints CEA Subramanian

Mr Subramanian was addressing the media on projections on Indian economy by ratings agencies Fitch, Moody’s and Standard & Poor’s (S&P) via video conferencing.

Mr Subramanian also said that the work to identify strategic and non-strategic sectors is still under progress.

But Banking will be part of strategic sector.

Banking to be a Strategic Sector hints CEA Subramanian
  • Operational efficiency gains will reduce their cost of lending
  • Building NextGen Banks
  • Enhanced capacity
  • Strong national presence
  • Global reach
Banking to be a Strategic Sector hints CEA Subramanian
Banking to be a Strategic Sector hints CEA Subramanian

Banking to be a Strategic Sector hints CEA Subramanian