Government considers Africa route to help central PSUs

GN Bureau | November 23, 2015




There is a new thinking to make public sector units profitable and the trick lies in going to Africa. Under the plan, the centre will help the PSUs to set up subsidiaries or form joint ventures with state-owned enterprises in poor African countries.

According to The Hindu newspaper, the proposal has been moved by the department of public enterprises (DPE) of the heavy industries and public enterprises (HI & PE) ministry. It is being studied by the ministry of external affairs.

The DPE wants the MEA to influence African countries, especially those with hardly any private capital investment currently, to replicate the ‘Nehruvian’ post-independence period industrial policy of India.

The DPE wants these African countries to reserve several sectors so that these PSUs can operate in a near monopolistic environment for about 15-20 years.

If the plan becomes a reality, many of the PSUs, currently struggling in India due to competition from far more nimble and efficient private sector companies, can get a new lease of life and turn profitable, they said.

The idea took shape when heavy industries minister GM Siddeshwara visited African countries including Malawi, Zambia, Nigeria and Liberia in September. The minister travelled as the special envoy of Prime Minister Narendra Modi as part of preparations for the recently concluded India-Africa Forum Summit in New Delhi.

According to the sources, though the DPE had written to the MEA asking the latter to include a ‘special session’ during the Summit on opportunities and challenges for Indian PSUs in poor African countries, the MEA had demurred citing difficulties in scheduling as most of the arrangements had been almost completed.

The new plan is to ask the MEA to convene a special meeting of all the African high commissioners / senior diplomats stationed in Delhi and elicit their views on the strategy. On its part, the HI & PE ministry will shortly call a meeting of PSUs to discuss the idea.

The development comes even as the centre has identified 58 loss-making PSUs for either reviving or closing them down, and has been holding inter-ministerial consultations to chalk out a viable strategy. It is also planning to raise Rs.69,500 crore from disinvestment of PSUs this year.

Africa is not entirely a new playing ground for Indian PSUs, especially for those in the energy sector.

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