Page 17 - August-2020-Issue

ARTICLE

PSEs have justified the role that companies featuring in Forbes In fact, they are net contributors
was entrusted to them with ut- 2000 - World’s Biggest Public to the Indian economy while con-
most commitment and sincerity. Companies for the year 2019, 10 tributing around 13% to Indian
They have laid the foundation for are PSEs besides 14 public sector GDP in terms of turnover. At this
the growth of the Indian econo- banks and insurance companies. juncture I would like to high-
myso much so that the sectors Considering their financial per- light that PSEs have proven their
where private sectors dominate formance, PSEs have been sus- strength, prowess, performance
were initially forayed into by the tained performers over the years and resilience even in the most
public sector. and earned revenue of 25.43 lakh challenging times of global fi-
crore rupees and registered a net nancial recession. This is appar-
profit of 1.43 lakh crore rupeesin ent from the fact that at the time
PSEs have justified the
role that was entrusted to FY 2018-19. of global financial crisis during
2007-2009, when private sector
them. They have laid the They contribute almost 4 lakh across the globe registered nega-
foundation for the growth crore rupees per annum to the tive growth rates in fact some of
of the Indian economy. Central exchequer in terms of du- them even filed for bankruptcies
ties, taxes, dividend etc. whereas causing not only financial losses
56 PSEs command nearly 10% of but also loss of employment, at
In fact presently also, PSEs lead the total market capitalisation of that time Indian PSEs not only
the sectoral contribution in stra- the BSE as on 31st March 2019. sustained their performance but
tegic sectors- 71% in crude oil registered growth of 10% in net
production, 92% in coal produc- Besides operational efficiency, profit from 2008-09 to 2009-10 and
tion, 83% in natural gas produc- PSEs have also displayed a fo- a healthy profitability ratio (net
tion to name a few. The revenue cussed approach towards achiev- profit to total revenue) of 6.6%
and profit growth by PSEs ex- ing commercial viability which is and 7.5% in 2008-09 and 2009-10
hibits the potential they have in reflected in the fact that out of 249 respectively. Furthermore, where
contributing significantly to the operating PSEs, 72% are profit shareholders were facing dimin-
nation. Not only in domestic mar- making as against 28% loss mak- ishing wealth due to loss in mar-
ket, some PSEs are recognised ing which is in contradiction to ket valuation of companies, PSEs
globally for their performance. the ‘popular belief’ that PSEs are maintained investors trust and
Presently, they earn a foreign ex- a drain on national resources. continued a healthy dividend
change of nearly 1.5 lakh crores payout ratio of 35-36%.
rupees per annum. Also, out of Out of 249 operating
6 Indian companies featuring in PSEs, 72% are profit In the present times also PSEs
the prestigious Global Fortune making as against 28% are considered as safe invest-
500 list for the year 2020, 3 are loss making. ments due to high dividend
PSEs and out of total 57 Indian payouts along with sustained

KaleidOscope August, 2020 17