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Journalism of Courage
It is a healthy sign that proposals for disinvestment, privatisation and closure of PSUs are being floated despite the Left and its veto powers. After all, all that the CMP promised was that profit making PSUs will not be privatised. If loss making PSUs are shut down it is not contrary to the CMP. If a private company is willing to take over a loss making one to revive it, the government should go for it. Some PSUs have been making losses for years, have negative net worth and it may be difficult to find buyers for them. In such cases, assets such as land may be sold, claims settled and the company wound up, rather than allowed to continue consuming taxpayer8217;s money.
The proposal to sell minority stakes of up to 49 per cent in profit making PSUs is also welcome. It will not dilute the public sector character of the PSU, while at the same time it would raise money for the government. The government should, however, make sure that the money raised goes towards retiring government debt and not into current expenditure. This will bring down the share of tax collections that go into paying interest on past debt and free resources for public goods. In addition to reducing public debt, the sale of minority share will lay the ground for further privatisation of PSUs through a wide dispersion of ownership.
