The NDA approach to PSUS

The Modi govt's equity contribution to public sector units has risen even as their capacity to generate resources has taken a hit

E I very year, through the Union Budget, the Centre releases data on investments made by public sector undertakings (PSU) and the resources generated or mobilised by them. For instance, this month's Interim Budget shows that capital investments to be made by as many as 169 PSUS (including the Indian Railways) in the current year are estimated at 8.4 trillion, up 15 per cent over such expenditure in 2022-23. Ten years ago, there were 147 such entities, whose capital outlays in 2013-14 were estimated at ₹3.32 trillion.

If you look at these numbers from a broader perspective, you will get a better sense of the PSUs' performance regarding their capital investments, the extent of the financial support they received from the Centre and the state of their capacity to generate resources on their own.

And that exercise should impart a fresh understanding of those trends if you compare such PSU investments made in the 10-year period of the Manmohan Singh government with those made during the subsequent 10 years when Prime Minister Narendra Modi was at the helm in New Delhi.

So, what does such a decadal comparison show? On capital outlays by PSUs, the Modi government has done well. Such investments during the 10 years between 2014-15 and 2023-24 (at ₹65.71 trillion) rose more than three times over those made in the 10-year period between 2004-05 and 201314 (at 19.92 trillion).

But this will appear to be a relatively small increase when you compare them as a per cent of the total size of the Centre's Budget or even of India's gross domestic product (GDP). PSUs' capital outlays during the Manmohan Singh era were 20.58 per ILLUSTRATION. DINAV CINLIA cent of the total Budget expenditure and they rose to 23 per cent during 2014-24. Similarly, PSUs' capital outlays as a percentage of GDP moved up marginally from 3.05 per cent to 3.32 per cent in the same period.