Indian PSU’s are bleeding while the govt is running out of bandages

For any economy to flourish in the long term, it is essential that Public sector undertakings (PSU’s) or govt owned corporations run profitably since they are typically too large and indispensable. If they don’t, they’re just another liability that the govt must pay for from its budget (best example – Air India’s bailout package has been increasing since forever). 

Unfortunately, India’s PSU’s are failing miserably. Bharat Sanchar Nigam Limited (BSNL) that never even entered the race with Reliance Jio & other private players (since it doesn’t even offer 4G) was unable to pay the salaries of its employees for the first time in history and now, reports indicate that the govt is helping it take a loan of 2500 Crores to survive for 6 months (so decision makers can come up with a plan for its revival). 

In case you didn’t know the difference in operational efficiency of PSU’s and private companies, we’d like to point out that Airtel had b/w 16k-18k (2017) employees as it earned close to 96000 crore rupees in revenue (2017) whereas BSNL’s employee count is higher than 1 lakh people compared with the telco’s revenue at 25000 crore. 

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