Indian Economy: News and Discussion

sauntheninja

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ezsasa

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How do you guys think PSUs affecting our overall economy?

I just read a report about GoI selling 26 PSUs. Seems like many of them making huge losses every year.
core strategic PSU should always stay, just like coal powered power plants will always stay to manage the base load.

After cyclone hudhud it was PSU BSNL that saved people’s ass, airtel and others were more worried about putting more diesel(cost) in generators of mobile phone towers.
 

DivineLight

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core strategic PSU should always stay, just like coal powered power plants will always stay to manage the base load.

After cyclone hudhud it was PSU BSNL that saved people’s ass, airtel and others were more worried about putting more diesel(cost) in generators of mobile phone towers.
Cyclones come once in a blue moon. Just for that advantage, we have to run thousands of crores loss ventures?
Check the figures,
BSNL has incurred a cumulative loss of Rs 17,645 crore between 2015-16 to 2017-18 and its loss in FY 2018-19 is pegged at over Rs 14,000 crore. The total loss of BSNL in the last four years has been pegged at close to Rs 32,000 crore.
 

ezsasa

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Cyclones come once in a blue moon. Just for that advantage, we have to run thousands of crores loss ventures?
Check the figures,
"There are decades where nothing happens; and there are weekswhere decades happen"--Vladimir Ilyich Lenin.

Private companies can keep making their money, no problems their right if they have a good product to offer.

But we as people need assurance that somebody will come to our rescue when $hit hits the fan.

I see strategic PSU industries as a safety net and it’s not always about costs.

ex:
1) look at how India’s strategic interests got impacted when Vedanta copper plant got closed.
2) look at how big tech is behaving now once they reached near monopoly.
3) Visa and MasterCard had more than two decades of dominance to bring digital banking to the masses in India , and it required NPCI to democratise digital banking. today 500 billion $ worth transactions are happening on digital platforms.
 
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DivineLight

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"There are decades where nothing happens; and there are weekswhere decades happen"--Vladimir Ilyich Lenin.

Private companies can keep making their money, no problems their right if they have a good product to offer.

But we as people need assurance that somebody will come to our rescue when $hit hits the fan.

I see strategic PSU industries as a safety net and it’s not always about costs.

ex:
1) look at how India’s strategic interests got impacted when Vedanta copper plant got closed.
2) look at how big tech is behaving now once they reached near monopoly.
3) Visa and MasterCard had more than two decades of dominance to bring digital banking to the masses in India , and it required NPCI to democratise digital banking. today 500 billion $ worth transactions are happening on digital platforms.
Brother, are you trolling me with Lenin quote? 🤣

PSUs themselves don't provide safety net. Demand drives the market. In India's case, public firms enjoy royal status while private players have to literally pump their blood into it to keep it running. No one asking them to sell Electricity board to private players. But rest of them have very little impact on our strategic interests.

btw didn't government run industry which put us in this state to begin with? Even soviets not running PSUs anymore.

to reply to your individual points,
1) So government run company will improve the situation? It's shame on government for not providing financial security cover to private players. Again check the benifits PSUs enjoy.

2)Good one. Look what our DPSUs doing to our defence industry. We are stuck in 70s. Big Tech screwing some political party is much smaller thing compared to MIC screwing their military.

3) NPCI might be heading the UPI project. But it was developed by some private software company. I forgot the name of it.
 

DerBronzeLord

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"There are decades where nothing happens; and there are weekswhere decades happen"--Vladimir Ilyich Lenin.

Private companies can keep making their money, no problems their right if they have a good product to offer.

But we as people need assurance that somebody will come to our rescue when $hit hits the fan.

I see strategic PSU industries as a safety net and it’s not always about costs.

ex:
1) look at how India’s strategic interests got impacted when Vedanta copper plant got closed.
2) look at how big tech is behaving now once they reached near monopoly.
3) Visa and MasterCard had more than two decades of dominance to bring digital banking to the masses in India , and it required NPCI to democratise digital banking. today 500 billion $ worth transactions are happening on digital platforms.
@ezsasa While I agree with your point, do remember that private sector companies always innovate faster. If you run a business on yesterday's tech, you will have to shut your biz down. PSU's in India are notoriously inept at innovating or just getting shit done on time.

But PSU's do not necessarily have to be shit. The best example is Singapore and China. Posting a few links so you see what I mean:

https://economictimes.indiatimes.co...-psu-models/articleshow/36215704.cms?from=mdr

https://fortune.com/2015/07/22/china-global-500-government-owned/
 

shade

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@ezsasa While I agree with your point, do remember that private sector companies always innovate faster. If you run a business on yesterday's tech, you will have to shut your biz down. PSU's in India are notoriously inept at innovating or just getting shit done on time.

But PSU's do not necessarily have to be shit. The best example is Singapore and China. Posting a few links so you see what I mean:

https://economictimes.indiatimes.co...-psu-models/articleshow/36215704.cms?from=mdr

https://fortune.com/2015/07/22/china-global-500-government-owned/
I have always said this, saying it again.
PSUs in China run like private companies.
PSUs in India are MNREGA programs to keep folks employed.
Employment is the main focus of PSUs here, everything else is secondary, even the "strategic" objectives they serve like BSNL.
No consequences are faced for ineptitude and incompetence, they will keep their job, their rank and receive bonuses.
 

DerBronzeLord

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I have always said this, saying it again.
PSUs in China run like private companies.
PSUs in India are MNREGA programs to keep folks employed.
Employment is the main focus of PSUs here, everything else is secondary, even the "strategic" objectives they serve like BSNL.
No consequences are faced for ineptitude and incompetence, they will keep their job, their rank and receive bonuses.
Precisely what should be amended. Would it be possible to use MNREGA for menial shit like infrastructure projects? I am unaware of where exactly it is used. If it can be solely diverted for infra rather than PSU's like this, we could very well generate jobs in mega projects like Sagarmala or something.
 

shade

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Precisely what should be amended. Would it be possible to use MNREGA for menial shit like infrastructure projects? I am unaware of where exactly it is used. If it can be solely diverted for infra rather than PSU's like this, we could very well generate jobs in mega projects like Sagarmala or something.
MNREGA is some employment scheme for poor folks who have no other skill than manual labour.
In the same way, modern PSUs are an employment scheme, there are 0 consequences for fuck ups.

The problem is not PSUs itself like China has showed, but it is the fact that the management is made up of lazy babus at the top and lazy employees at the bottom, to whom nothing will happen if their company fails, they can't even be thrown out because of unionbaazi drama.

During Chichora Chacha era this was supposed to be temprorary, but since then it has become permanent.

Whatever law deals with PSU establishment and management needs to be amended.


An anecdote, but long ago when i used to go to local MTNL exchange to pay internet bill, there always used to be 50-60 year old budha/buddis as the majority of the ~20 or so employees I could see with just one middle aged woman.
You can bet these all are "lifetime employees" who have spent their lives comfortably "working" at the "standards" you can expect from a PSU.
 

Bhumihar

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MNREGA is some employment scheme for poor folks who have no other skill than manual labour.
In the same way, modern PSUs are an employment scheme, there are 0 consequences for fuck ups.

The problem is not PSUs itself like China has showed, but it is the fact that the management is made up of lazy babus at the top and lazy employees at the bottom, to whom nothing will happen if their company fails, they can't even be thrown out because of unionbaazi drama.

During Chichora Chacha era this was supposed to be temprorary, but since then it has become permanent.

Whatever law deals with PSU establishment and management needs to be amended.


An anecdote, but long ago when i used to go to local MTNL exchange to pay internet bill, there always used to be 50-60 year old budha/buddis as the majority of the ~20 or so employees I could see with just one middle aged woman.
You can bet these all are "lifetime employees" who have spent their lives comfortably "working" at the "standards" you can expect from a PSU.
Basic mandate for continue running a PSU should be showing a certain amount of profit on balance sheet.
Psu don't need to show 12% profit some 2 to 5 % will do.
Any situation where the PSU is not racking enough profit is good for them and the nation.
This has already been discussed to death and many people become hyper when defending PSU so aint wasting time on this.
 

DivineLight

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The problem is not the discussion. It's our fiscal deficit. Except Oil, Gas and Power, most of the PSUs are not performing that good.
The number of profitable companies decreased from 74 per cent (2009) to 72 per cent (2018). But just ten companies accounted for nearly two-thirds of the total profits, mostly from oil, gas and power corporations. Indian Oil Corporation, ONGC and NTPC were the top three profit-making companies during the financial year 2018. Indian Oil is contributing maximum 13.37 per cent profit share followed by ONGC (12.49 per cent) and NTPC Ltd (6.48 per cent) to the total profit earned by profit-making CPSEs.
These PSUs going to perform well even in future. But rest, we spend money to just pay the salaries.

Also what about expanding our industry? When private players not having any good support from GoI, who will give jobs to the youth? Surely not everyone want to learn Java or SQL.

Only big industries coupled with MSME can provide jobs in numbers. It's another crisis in making.
 

sauntheninja

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The problem is not the discussion. It's our fiscal deficit. Except Oil, Gas and Power, most of the PSUs are not performing that good.

These PSUs going to perform well even in future. But rest, we spend money to just pay the salaries.

Also what about expanding our industry? When private players not having any good support from GoI, who will give jobs to the youth? Surely not everyone want to learn Java or SQL.

Only big industries coupled with MSME can provide jobs in numbers. It's another crisis in making.
That's a major reason why we need to bring manufacturing to the country our service sector can't employ these many people but the thing that needs to change is the attitude among people whenever the govt talks about privatizing the psu's everyone complains that they are selling the country off look at the farmer's protests they routinely complain that the govt is selling off to ambani or adnani
 

DivineLight

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That's a major reason why we need to bring manufacturing to the country our service sector can't employ these many people but the thing that needs to change is the attitude among people whenever the govt talks about privatizing the psu's everyone complains that they are selling the country off look at the farmer's protests they routinely complain that the govt is selling off to ambani or adnani
That's glimpse of future. The reason I even bothered with PSU discussion is, how much our country spends on these things. Yesterday, I was going through farm subsidies and schemes. You will be surprised with the numbers.
(last budget)
$15,831,636,129 on food subsidy
$9,768,435,932 on fertilizer subsidy
Schemes worth billion dollars.
Add loss making PSUs to the list. And PSU Bank NPAs.

Huge chunk of our budget is spent on these things. I am not against looking after poor. But at same time, look how much our government spending on no-returning ventures. Most of the money is locked in self-feeding loop.

With GoI aversion to everything private, very little investment will happen from private players. Millions of youth coming out of colleges every year. Already everyone talking about jobs. They will just blame modi and vote rahul gandhi who will promise some monthly money for every young guy.

It's going to be worst disaster than 1990 crisis.
 

sauntheninja

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That's glimpse of future. The reason I even bothered with PSU discussion is, how much our country spends on these things. Yesterday, I was going through farm subsidies and schemes. You will be surprised with the numbers.
(last budget)
$15,831,636,129 on food subsidy
$9,768,435,932 on fertilizer subsidy
Schemes worth billion dollars.
Add loss making PSUs to the list. And PSU Bank NPAs.

Huge chunk of our budget is spent on these things. I am not against looking after poor. But at same time, look how much our government spending on no-returning ventures. Most of the money is locked in self-feeding loop.

With GoI aversion to everything private, very little investment will happen from private players. Millions of youth coming out of colleges every year. Already everyone talking about jobs. They will just blame modi and vote rahul gandhi who will promise some monthly money for every young guy.

It's going to be worst disaster than 1990 crisis.
Every country spends money to subsidize agriculture in fact developed countries spend more than India. The government shoudnt necessarily stop spending money on these things but infact make doing business easier which is sucks at doing changing laws every month and harassing companies etc
 

DivineLight

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BTW everyone who supports Modi/BJP shouldn't give free pass to PSUs. They are nesting grounds for commies. Administration and workers both are anti-Modi and BJP.

They will go after labour reforms next. It's going to be another crisis. Even the babus who work in GoI may not have best interests. They will drag their feet from GoI side and foot soldiers from commie unions and other gangs will hit streets. It will be double whammy.

Best of luck defending Modi when it happens.
 

DerBronzeLord

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BTW everyone who supports Modi/BJP shouldn't give free pass to PSUs. They are nesting grounds for commies. Administration and workers both are anti-Modi and BJP.

They will go after labour reforms next. It's going to be another crisis. Even the babus who work in GoI may not have best interests. They will drag their feet from GoI side and foot soldiers from commie unions and other gangs will hit streets. It will be double whammy.

Best of luck defending Modi when it happens.
Modi should remove the commies and PFI/SDPI likes from the whole country. If Kerala wants them and has bred them, let them keep them to themselves. The rest of the country doesn't want those suckers. India honestly needs its own McCarthy moment.

My belief when it comes to the PSU's is, retain companies in critical sectors, incentivise the babus running the profit-makers(no transfer policy here btw), privatise everything else, and cut down the important PSU's making a loss to the bare minimum such that they can have the capability to expand their operations to the required level when necessary. India had zero test capability in March, we managed to expand it into millions in a matter of one and a half month. If possible, we should have this capability for companies like BSNL.

Btw, absolute noob question, but if the entire bloody PSU is inefficient and they are protesting, would it be possible to lay them all off and hire a fresh new batch of workers? Low-level workers can easily be replaced, while we have a freaking surplus of engineers today. I am unaware if this can be done, and if it can, what would be the fallout?
 

DivineLight

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Btw, absolute noob question, but if the entire bloody PSU is inefficient and they are protesting, would it be possible to lay them all off and hire a fresh new batch of workers? Low-level workers can easily be replaced, while we have a freaking surplus of engineers today. I am unaware if this can be done, and if it can, what would be the fallout?
You are understimating labour unions we have in our country. With very little private industry, where do you think they get the numbers? If you try to remove even single guy, you are doomed. The babus in GoI show special love to these unions. Cuz these babus head PSU administration boards. It's rigged game.

No one dares to touch these workers. Even private firms have no control over them. Google the cases. Many private firms making losses because of this.
 

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