The Importance Of Public Sector Undertakings Economics Essay

The Importance Of Public Sector Undertakings Economics Essay ABSTRACT Public sector undertakings (PSUs) are considered to be vital and crucial pillars for strengthening countrys economy. The prime purpose of starting public sector enterprises was to fabricate infrastructure for economic growth and economic development. Since their birth PSUs have played an essential role in achieving the goal of economic development. Various factors such as deterioration of financial performance of PSUs, rising fiscal deficit forced Government to adopt a radically new approach towards the working of PSUs. The policy measure implemented involved Disinvestment of public sector undertakings (PSUs) .During the regime of P.V Narasimha Rao, entire new economic policy of Liberalisation, Privatisation, and Globalisation (LPG) was introduced in India in the year 1991.Dr Manmohan Singh was the finance minister who successfully implemented the policy of Liberalisation, Privatisation, Globalisation (LPG) into India. The goal of Disinvestment policy was as follows: Improving the financial performance of PSUs. Generating resources to reduce the fiscal deficit. Promoting extensive public participation (including employees). INTRODUCTION Public sector undertakings (PSUs) are the companies established, maintained and controlled by the Central Government of India having 100% stake in it. In 1947 when India became independent, the country was confronting with a variety of socio-economic concerns which had to be resolved. India was mainly agriculture dependent economy with poor infrastructure facilities, no knowledge about investment, pathetic industrial base and low level of savings. There was wide difference in incomes of different people. The private sector neither had the necessary resources, trained managerial staff nor the ability to undertake risks involved in long term projects which forced the state government to intervene in all the sectors of economy. The type of problems faced by the country in all domains including economical, social obliged the Government of India to focus on public sector enterprises (PSEs) to empower self -dependent economic development. The holistic outline of public sector undertakings in India is heterogeneous mixture of service industries, manufacturing industries and infrastructural industries. The basic objectives of starting public sector enterprises in India were as follows: Generate employment opportunities. Reduce gap between incomes of different people by redistribution of wages. Promote rapid economic growth. Improve essential infrastructure for economic development. Support development of small and medium size enterprises (SMEs). Central public sector units are widely diversified in products and services from steel manufacturing, instruments and machine tools, road transport, power generation, mineral mining, coal mining, manufacture of heavy machines, telecommunication equipment, equipments for thermal power station. Over the last five decades, huge investments have been done in public sector enterprises to expand their production, employ new emerging technologies. As on 31st March, 2005 there were 237 central public sector undertakings out of which 10 fall under the category of enterprise under construction, 144 are from field of manufacturing/producing goods and 83 under the head of enterprises providing services. From the Table-1 it is evident that initially at the commencement of First Five Year Plan, only Rs.29 crore was the total investment for 5 enterprises. After gradually increasing the budget, at the commencement of Fifth Five Year Plan, the total investment reached whooping Rs.6237 crore and the n umber of units became 122.By the end of the fifth Five year plan, total investment touched Rs.15534 crore and the number of enterprises reached 169.From the data, it is quite clear that there has been increasing trend of investment from the commencement till the end of fifth five year plan, a rise of 149.06 % is observed. Similarly a hike of 57.70% in investment was examined from the start till the end of eighth five year plan. The investment made in public sector in 2005 was Rs.3, 57,849 ,an increase of 2.24 % from 2004.It can thus be concluded that there is increasing tendency towards investment made in the different five year plan. TABLE 1: DISINVESTMENT The dictionary meaning of word disinvestment is opposite of investment. Investment means putting money into something with the hope to generate profits from it. So disinvestment means to pull out money from the investment. Initially central government had 100% stake in all the public sector enterprises, but due increasing fiscal deficit government is forced to sell 5 or 10 % stake to the public, thereby generating income for government spending. This way the government is losing full control over the corporations, but has no other option. Many times the government finds it very difficult to fulfil all the financial obligations of public sector enterprises, hence undergoes rigorous resource crisis. To bring back countrys economy on right path, disinvestment formed an important part of structural reforms carried on by the government. The two most important reasons which favour disinvestment are as under: Offer financial support to public sector undertakings (PSUs). Develop effectiveness efficiency of the public sector enterprises. The resources raised from the sale of the stake of enterprises must be utilized for clearing past debts and thus reduce interest burden of government. Principal goals for privatising the PSUs The key objectives for privatising the PSUs are, as under: Discharge huge amount of public resources blocked in non-strategic public sector enterprises divert them towards more social issues like primary education, health and necessary infrastructure. Decrease the public debt. Encourage wider public participation by releasing shares in market. Help the government reduce interest burden. To facilitate the growth of the nations economy. Freeing of tangible and intangible resources like labour blocked in maintaining public sector enterprises reorganizing it towards high priority areas which have scare resources. Some additional benefits from privatisation The other advantages to be gained from privatisation are: Disinvestment would picture the private firms towards more market discipline, compelling them to be more effective in their operations, working style. They would act in more responsibly and professional manner by responding to market forces at a greater pace. This would lead towards insertion of corporate governance into privatised companies releasing them from the government control. Disinvestment would yield in fairer distribution of wealth among different individuals, as the shares of public sector enterprises would be offered to small investors and employees. Disinvestment would have a great impact on capital markets, as the more stock inserted into market would bring in more liquidity allowing small investors with easier options to exit from market. It would result in forming more precise benchmarks for estimation of value, pricing. Opening of vast portion of public sector for private participation would raise economic growth benefitting nations economy, employment prospects and tax collections in near future. In many sectors like civil aviation, insurance, telecom, the introduction of private sector has brought in more customer satisfaction by delivering variety of products and services at cheaper rate and better quality. This even increased competition in the market. In case of civil aviation people were fed of Air-Indias services and were demanding entry of private players into field of aviation. The economic reforms along with the public sector reforms were mainly focussing on improving the effectiveness, efficiency production output. Nowadays disinvestment, privatisation is grabbing everyones attention as government is disinvesting stake in 5 to 6 companies every year. The government is planning to divest about 6 companies in year 2011. The New Industrial Policy states that a part of the Government stake in the public sector enterprises would be offered to various financial institutions, mutual funds (MF) and small investors in order to promote large public participation. In the current era of globalization, disinvestment would provide the motivation needed for the public sector corporations to make their mark in the list of top global companies. The Government of India formed a committee under the leadership of Shri V.Krishnamurthy to guide through the various characteristics of the process of disinvestment. It was Dr C Rangarajans committee reports suggestions which reso lved complex and complicated issues related to disinvestment. Similarly to a sports or a revenue department, an entire new department for disinvestment was formed which could solely focus on disinvestment issues, corporations which can be divested. During the NDA government rule, Shri Arun Shourie was the disinvestment minister. When UPA-1 regime started, disinvestment ministry had to be merged with finance ministry due to the mounting pressure from left parties (who are socialist attempting to reduce gap between rich poor) who strongly opposed the formation of disinvestment ministry. Large number of corporation which were divested fell under the category of petroleum oil exploration sector followed by metal, mining and minerals sector. There are basically two approaches to the process of disinvestment: First approach in which the PSUs under the guidance of government issues fresh equity shares which can be brought by small retail investors, QIBs, financial institution, Mutual funds. Second approach in which the government sells it stake directly to the concerned public sector enterprises, interested retail investor, large financial institution.

All My Sons: Millers Chief Criticism Of American Society Essay examples

All My Sons: Miller's Chief Criticism Of American Society A shot was heard throughout the Keller home as Joe ended his guilty, worthless life. Miller criticizes that American society has become corrupt- a place of selfishness, where people care too much about themselves, and that which benefits them, and will go to any lengths to achieve that goal; even if the repercussions of their actions will bring harm to other people. He stresses that money seems to be the key factor that drives society to this level of corruption. Miller emphasizes this point in several ways. The first example is that Keller knowingly ships out cracked cylinder heads, that will crash an airplane if used, to prevent his business from going bankrupt, claiming that he did it for his family. The second example is that Sue would rather Jim make allot of money, and not do medical research- which is what he really wanted to do. The third example is Jim's abdication of his pursuit of medical research do to the lack of profit involved. In his play "All My Sons," Miller makes it apparent that society in general values money and profit more than human life. He shows this by his portrayal of Keller. Keller ships out cracked cylinder heads, aware that in flight they will cause planes to crash, to save his business from being shut down. Furthermore, he goes on to allow the blame to fall on Steve, in order to save hims...

Happiest Moment

Everyday I wake up feeling grumpy . It ‘s a brand new day , but I know nothing new will happen . It ‘s the same old school-house routine and I ‘ve grown tired of it . School can be really boring sometimes . Or maybe most of the time . One day , in one of our group works in school , an outreach program actually , we were asked to visit a home for street children . The group ‘s task was to conduct some sort of a peer tutorial session with the street children in subjects like math and science.We were to teach them just the basics — addition , subtraction , the human body . Stuff like that . In the process , we were also to observe their behavior and how they respond to us . I thought to myself , great . So I ‘ll spend my whole morning with a bunch of street kids . From what I know , street kids are mostly ill-mannered . What a waste of time , I know I won ‘t get anything from it anyway . I might even get into a fight with those kids . But still I went to the home just to comply with the school requirement . I almost dragged my feet when we entered the home.The home supervisor met us at the entrance and led us to a room which she called their play area . When we opened the door , about 20 kids gleefully greeted us , â€Å"Good morning , visitors ‘ I was surprised , and so were my group mates . I saw and felt the excitement of the children knowing that visitors were arriving in their home . Then they all sat down quietly , eager to listen to whatever we will be teaching them that day . My group mates and I introduced ourselves to the children and we started with the lessons right away.Good thing my group mates prepared some games that were related to the s we taught to the kids . I had so much fun , I even found myself cheering on the kids during the relay games . Time passed quickly that morning . Before we knew it , it was already time to go . As we were packing up our things , a kid approached me and said ,  "Thank you ‘ and hugged me tightly . She smiled to me then left to join the other kids who were already in the dining area having their lunch . It was my happiest moment.I ‘ve never appreciated school activities like that before , and I ‘ve never felt appreciated like that before either . Perhaps my grumpiness has always engulfed me . Since that day at the home , I started to notice things that I never minded noticing before . I observed that my mom always smiled at me while she ‘s preparing my breakfast , and that my classmates always greeted me whenever I see them . My teachers praise me when I get A ‘s in my tests . I realized there are so many beautiful things happening around me and I am surrounded with wonderful people . There are a lot†¦

Portrayal Of Reality In Great Gatsby Essays - The Great Gatsby

Portrayal Of Reality In Great Gatsby Essays - The Great Gatsby Portrayal Of Reality In Great Gatsby Mr. Gordan, an esteemed English teacher, once said Literature is Life. I had not been able to grasp the reality of those words until I read The Great Gatsby . After reading The Great Gatsby, I understand that literature is written through inspiration from our daily lives. In this novel, F. Scott Fitzgerald portrays the themes of morality and life versus illusion. Through his excellent writing techniques, Fitzgerald reduces most of the characters of the novel as seemingly obsessed with material possessions, petty, and selfish. Theses characterizations are portrayed because of the realness of human nature. Fitzgerald uses contrasting morals and values of the characters to show the true disparity in human nature. Nicks characteristics are completely incompatible with Toms. Since Nick has a strong foundation and is honest, he is thus very faithful. His faithfulness and loyalty is apparent when he attends and organizes Gatsbys funeral. On the other hand, Tom is unfaithful and dishonest. He is dishonest with Daisy and Myrtle. He also shows his unfaithfulness when he is not present at the birth of his daughter. In addition, Fitzgerald also uses Tom and Gatsby to show the sentimental disparity. Gatsby is a dreamer and a romantic man, who by following his dreams, went from rags to riches. He is proud of the fact that he has been able to accumulate his wealth independently, despite the fact that it is hinted that much of his money was earned illegally. Tom, on the other hand, is a realist and a straightforward man. He does not dream, as Gatsby does; he merely acts on his instincts. He has not earned his great wealth: he has inherited it. In spite of the fact, that all of the main characters in The Great Gatsby have very different personalities; they are however all affected by money. Some characters, like Gatsby and Tom Buchanan, have money, and are very expressive with it. Other characters, such as Myrtle, lust for money. Essentially being of the middle class, Myrtle's attraction to Tom is not based on love or affection. Rather, Tom represents something that Myrtle has never had : endless wealth; and with this Myrtle correlates happiness. Fitzgerald uses the lust for money in his novel because it is one thing that almost everybody in the world lusts for. He also tries to use the prejudices against rich as being flamboyant and superficial to create a contempt against Tom Buchanan and Daisy. However, these prejudices might have some truth or reality to them as Fitzgerald shows it in the end through Nicks judgment. Fitzgerald also adds a dash of reality to his novel when Gatsby doesnt achieve his dream of winning Daisy back from Tom. In this case, the strong, bullying character of Tom represents reality, and with his powerful nature he easily squashes any hopes that Gatsby may have of a relationship with Daisy. This shows that sometimes dreams dont come true, as opposed to the fairy tale version of . and they lived happily everafter. Although, Fitzgerald may despise all that the American dream stands for, he more importantly illustrates that it is not always easy to obtain it. The novel ends with the death of Gatsby. This may seem surprising to the reader, as Fitzgerald seems to have built Gatsby up as being one of the true heroes of the novel. However, Fitzgerald understands that reality is often very harsh to dreamers, a central quality in Gatsby's character. The death of Gatsby, and the unaffected life of Tom after both Gatsby's and Myrtle's death is testament to the fact that illusion is often shattered when confronted with reality. Rather than this fact detracting from Gatsby's character; the reader, however, supports the image of Gatsby all the more: a man who has died while in pursuit of something worthy. This alternative is far better than any other solutions. If Gatsby had not died, then he would have been desperate and desolute. In addition, Tom would have had the upper hand and would have only enlarged his own ego. Fitzgerald ends the novel with another reality. He shows that Gatsbys life had no worth if measured with how many real friends

Paralympic Games and Sledge Hockey Essay

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Essay on a disease ( OBESITY) Example | Topics and Well Written Essays - 750 words

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Lighting the Way to the Future Case Study Example | Topics and Well Written Essays - 500 words

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