Public ownership: The move will help in increasing the people’s ownership of the equity of these companies.
Challenges
Issue of valuation: The issue of maintaining transparency and arriving at the proper valuation will be a difficult task before the policy makers.
Fear of false accusation: The increased scrutiny of the decisions by zealous investigating agency may deter the decision makers from taking decisions on strategic sale of loss making PSUs.
Opposition by labour union: The move to privatize these companies will be opposed by the labour union who fear loss of jobs, social security and increase in contractualization of workforce.
Welfare aim subordinated: As the aim of private sector companies is profit maximization so the welfare of vulnerable section of the society may take a back seat.
Poor utilization of fund raised: The revenue generation from the strategic sales should not be used to fund the deficit but should have been specifically invested for capital investment purpose like infra development.
Way Forward
The decision of strategic sale should be taken after due deliberation and involving all the necessary stakeholders.
Moreover, as suggested by the 14thFinance commission, the PSUs should be classified in different categories on basis of their strategic importance. This move will help in making quick and informed decisions.
