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
4.Applications of radiation to agriculture, medicine
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.
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.
- 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