Why is the government Privatising profitable Psus?

In strategic sectors with more than 0 PSU’s, the government will privatize, merge or consolidate the PSU’s under holding companies in order to reduce wasteful administrative costs. Since financial year 1991-92 to 2017-18 the Government of India sold public assets totalling ₹3,47,439 Crore.

Is it a good idea to Privatise even the profit making public sector enterprises?

There are many public sector enterprises that are making losses. Many of these have to be supported by taxpayer’s money.

What happens if Psus are Privatised?

While government-run organisations follow a reservation policy for SC/STs, no such policy applies to the private sector. With the privatisation of a PSU, the reservation for SC/ST employees is also nullified. There’s no provision to keep the seats intact on humanitarian grounds.

What are the reasons for privatization in Nigeria?

The main reason for privatization is for economic growth and development, to reduce waste and to encourage the development of the economic sectors.

Why did Govt decide to privatize PSUs?

Govt first tried to justify privatization by saying that sick PSUs are burden on govt expenditure and their disinvestment may likely attract investors which may improve financial condition of PSU, and if this is not the case, at least the losses can be compensated by earning through this disinvestment (selling PSUs to public/corporates etc).

Does the temptation to privatise public sector enterprises stop with PSUs?

Further the temptation to privatise did not stop with PSUs. Contrary to the accepted rationale of privatisation, we have seen the government withdrawing from health and education sectors, leaving the citizen with almost no choice but to seek costly education and unaffordable healthcare offered by the private sector.

Should PSU sectors be opened to private sector participation?

Yes ,it is true that many sectors could be opened for private participation. In the past some sectors like airlines, telecom has been opened to private sectors and has done reasonably well. Customers are indeed benefited. But , I also believe that well performing sectors specially those dominated by PSU should not be tampered with .

What is the government justification for selling PSUs?

A lot of PSUs are loss making for many years. So govt justification to sell psu to meet their expenses is a false narrative. In fact, these are being sold to meet the revenue targets/ tax targets set by the govt. So No justification can be made on selling PSUs. A general thinking for IPO/stake selling is to expand the business.