India Celebrates First Public Sector Day

At the initiative of SCOPE and with the cooperation of the Ministry of Heavy Industries and Public Enterprises, April 10 is to be celebrated every year as the Public Sector Day.

The Day would be an occasion to remember the travails and the tribulations that the sector has undergone over the years to eventually rise as a colossus on the corporate horizon of India. The achievements of the Central Public Sector Enterprises in India will be brought to the attention of the Nation.

From a humble beginning to the towering symbol of India’s corporate sector, the Public Sector has received this recognition after six decades of its untiring efforts in India’s march to becoming a global economic power.

In celebrating the Day, SCOPE would always be remembered for its steadfast espousal of the cause of the Public Sector in India. The relevance and the pivotal role the public sector has played in bringing Indian corporates to the forefront of global exposure. It is befitting that the Day coincides with the day of launching of SCOPE thirty seven years ago in 1973 on April 10.

The Central Public Sector was confronted with real challenges in encountering the competitive – domestic as well as global – paradigm unleashed in the wake of the economic reforms of 1990s. Its domain of reserved areas shrunk from 17 to 3, yet it chose to stay in areas opened to private sector and still managed to perform admirably well. It is worth appreciating that India’s resilience against the impacts of the global meltdown witnessed since mid-2008, was largely due to the robustness of the public sector.

As the equity capital increased to more than three times during 1991-2009 period, the turnover went past ten and half times. As a rejoinder to those who questioned the viability of the investments, the net profits were thirty seven times on the base year of 1990-91. Concomitantly, the resource efficiency was seen in the reserves and surplus jumping to sixteen and half times, while the net worth moved close to ten times in 2008-09.

As a result of the upsurge in financial performance, The CPSEs in the manufacturing segment contribute nearly a fifth of the total manufacturing output in India.

The sector has been financing its growth through its own generations. The internal generation of resources jumped to nearly ten times in 2008-09 over 1990-91.

Among the top ten most valuable companies in terms of market capitalization, six are CPSEs, with five of these occupying second to sixth ranks, such as ONGC, NTPC, MMTC, NMDC and SBI. BHEL is the other CPSE among the top ten. The CPSEs listed at the BSE contribute nearly 25% of the total market cap, while numbering only about a percent of all the listed companies.

The public sector personnel have become an impressive source of manpower for the private enterprise. This has been made possible by adopting and assimilating the modern day management techniques. CPSEs have an unparalleled record of contributing and shouldering the corporate social responsibility that was the basic charter given to the public sector at its very inception.

Of the seven ranked Indian companies in Fortune 500 listing in 2009, five were CPSEs. The 47 Indian companies covered in 2009 Forbes global list of 2000 companies, 25 were public sector enterprises. Besides the State Bank of India which led the CPSEs, the tally included ONGC, Indian Oil and NTPC among the top 350 global companies. Others included in the list were SAIL, BPCL, BHEL, HPCL, GAIL and NMDC.

With such achievements, the Central Public Enterprise has spread its wings to undertake ventures in all the continents of the globe. The sector has been striving and is successfully ensuring India’s march towards becoming a global economic power over the next two decades. (PIB Features)

*Inputs from the Department of Public Enterprises

RTS/VN SS-73/SF-73/08.04.2010