Finance Minister Nirmala Sitharaman on Wednesday reeled out statistics to drive home her point that the country’s Public Sector Undertakings (PSUs) have shown a marked improvement in their economic performance in the last 10 years compared to the tenure of the Congress-led government prior to 2014.
The Finance Minister cited figures showing a surge in profits and net worth of these Government-owned enterprises to contradict as she stepped into the political debate on the issue amid the ongoing Lok Sabha polls.
She took to X to state that the claims of “INCIndia ecosystem, and Rahul Gandhi in particular, that Public Sector Undertakings (PSUs) are being dismantled & are in disarray under the current government are a textbook example of ‘Ulta Chor Kotwal Ko Daante,’ as the facts reveal a very different picture.”
Under the leadership of PM Narendra Modi, PSUs are thriving, benefiting significantly from the culture of professionalism infused in them along with increased operational freedom. The Modi government’s focus on capital expenditure has also led to substantial growth in their stock performance, she observed.
The greater alignment of management incentives (through the sharpening of performance-linked incentives), Capital Management Guidelines on dividends, buybacks, etc. and the calibration of the disinvestment strategy have helped improve the performance of the CPSEs and reposed investor confidence, the Finance Minister pointed out.
The focus on infrastructure development, power, logistics, etc. has directly benefited PSUs in Railways, roads, power, metals, construction and heavy equipment manufacture, she added.
The Finance Minister also said that the Modi Govt’s initiatives have helped the public sector banks (PSBs) to recover from the banking crisis created by the UPA. GNPAs in PSBs have fallen to decadal lows of 3.2 per cent and profits are at record highs, even as the push to financial inclusion brings formal banking to every corner of the country.
Nirmala Sitharaman provided figures to show the “transformation in PSUs” under the Modi Govt is evident from a comparison of parameters between FY 2022-23 and FY 2013-14:
Total Paid-up Capital of all CPSEs was Rs 5.05 lakh crore as of March 31, 2023, v/s Rs 1.98 lakh crore in FY 14, an increase of 155 per cent.
Total Gross Revenue from the operations of CPSEs during FY 2023 was Rs 37.90 lakh crore v/s Rs 20.61 lakh crore in FY 14, an increase of 84 per cent.
Net Profit of profit-making CPSEs stood at Rs 2.41 lakh crore in FY 2023 v/s Rs 1.29 lakh crore in FY14, an increase of 87 per cent.
Contribution of all CPSEs to the exchequer by way of Excise & Customs duties, GST, Corporate tax, Dividends, etc. stood at Rs 4.58 lakh crore in FY 2023 v/s Rs 2.20 lakh crore in FY14, an increase of 108 per cent.
Net Worth of all CPSEs increased from Rs 9.5 lakh crore as of March 31, 2014, to Rs 17.33 lakh crore as of FY-2023, an increase of 82 per cent.
Capital Employed by all CPSEs was Rs 38.16 lakh crore as of March 31, 2023, against Rs 17.44 lakh crore as of March 31, 2014, a growth of 119 per cent.
She also said that due to better management of PSUs, their share prices have tremendously increased in the last 3 years.
The total market cap of all 81 listed PSUs (62 CPSEs, 12 PSBs, 3 Public Sector Insurance Companies and IDBI Bank) has grown by 225 per cent.
Returns by NIFTY CPSE of nearly 78.8 per cent have significantly outpaced NIFTY 500 (27.4 per cent) and NIFTY 50 (22.5 per cent).
Market Cap of 12 listed Public Sector Banks (PSBs) has increased 2.95 times (195 per cent) from Rs 5.45 lakh crore (as of March 31, 2021) to Rs 16.12 lakh crore (as of March 31, 2024).
Notably, 15 CPSEs have experienced an impressive CAGR ranging from 76 per cent to 100 per cent, reflecting substantial value appreciation and investor confidence. Additionally, 25 CPSEs have demonstrated strong growth with CAGR ranging between 51 per cent and 75 per cent, while 28 CPSEs have shown steady expansion within the range of 26 per cent to 50 per cent.
She went on to say that in fact, even under former PM Atal Ji led NDA Govt, shares of PSUs had performed better compared to UPA, due to better management.
During 1999-2004 (NDA), the PSU index soared over 300 per cent, vastly outperforming the BSE Sensex’s 70 per cent gain.
Compared to this during 2004-09 (UPA I), the PSU index rose by 60 per cent, but this was only half the growth rate of the Sensex.
The FM further stated that during 2009-14 (UPA II), the PSU index declined by 6 per cent, while the benchmark surged by 73 per cent.
