Finance Minister Nirmala Sitharaman has called on public sector enterprises (PSEs) to improve their professionalism and efficiencies as the government opens up nearly every area to the private sector.
Speaking to heads of central PSEs in Gandhinagar as part of the finance ministry's week-long 'Iconic Week' celebrations, Sitharaman said the public sector must be ready to work and compete with the private sector.
"It is now time for PSEs to show that you are very keen to improve on your professionalism as much as you have done between 1991 and now. And where possible, in order to bring down the overheads, it might be worth looking at private participation together with what you are doing. There are several aspects where you can benefit from the efficiency of the private sector," the finance minister said.
As per the new PSE policy announced in 2021, central public sector undertakings (PSU) will maintain a minimal presence in four strategic sectors—atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking insurance and financial services.
In other sectors, central PSUs will be privatised, merged, or considered for closure.
According to Sitharaman, the new PSE policy means PSUs in these four strategic sectors must be thorough in their plans when it comes to scaling up and considering amalgamation or working with private companies.
"The moment you are opening up for the private sector to come in into an area, we in the public sector will have to be conscious of the level of competition which is going to be before us. And if we are conscious of the level of competition before us, I am sure - as you have done in the several decades past - you will face the challenge and will also be able to stand up and through better efficiencies be on the top rather than leave the space for efficiency to be elsewhere and your presence not being noticed," the minister said.
Sitharaman drew comparisons with the liberalisation reforms of the early 1990s, saying they were a "game changer" for the public sector as it allowed PSEs to compete with their private counterparts and "surely brought in a game-changing spirit of governance in the public sector enterprises".
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