Sitharaman Attributes PSU Success To Modi's Leadership, Recalls UPA's Struggles
Sitharaman noted that PSUs share prices have dramatically increased in the last three years, demonstrating her government's management.
Under Narendra Modi's government, public sector undertakings are thriving, as the focus on capital expenditure has led to substantial growth in the stock performance of state-run companies, Finance Minister Nirmala Sitharaman tweeted from her personal account on the social media platform X, formerly known as Twitter.
Sitharaman said she was responding to claims by the Indian National Congress and Congress leader Rahul Gandhi that the Modi government is dismantling Public Sector Undertakings. The finance minister stated that PSUs suffered under the Congress-led United Progressive Alliance government, while emphasising that these companies benefitted from the culture of professionalism infused in them along with increased operational freedom.
She described it as a "textbook example of Ulta Chor Kotwal Ko Daante, as the facts reveal a very different picture."
"PSUs that were previously neglected under the UPA government, such as Hindustan Aeronautics Ltd., have seen a resurgence under the Modi government," she tweeted.
The greater alignment of management incentives through the sharpening of performance-linked incentives, capital management guidelines on dividends, buybacks, etc. and the calibration of the disinvestment strategy have helped improve the performance of the CPSEs and reposed investor confidence, according to her.
Share prices of PSUs have dramatically increased in the last three years, demonstrating the government's management of PSUs, she said.
"The total market cap of all 81 listed PSUs (62 CPSEs, 12 PSBs, 3 Public Sector Insurance Companies, and IDBI Bank) has grown by 225%," she said, further stating that returns by Nifty CPSE of nearly 78.8% have significantly outpaced Nifty 500 (27.4%) and NIFTY 50 (22.5%).
The union minister also stated that the market cap of the 12 listed public sector banks has increased 2.95 times (195%) from Rs 5.45 lakh crore as of March 31, 2021, to Rs 16.12 lakh crore as of the end of March 2024.
"15 CPSEs have experienced an impressive CAGR ranging from 76% to 100%, reflecting substantial value appreciation and investor confidence," she said.
Hindustan Aeronautics' market valuation has skyrocketed by 1,370% in four years, rising from Rs 17,398 crore in 2020 to Rs 2.5 lakh crore as of May 7, 2024, Sitharaman said about individual cases of PSU divestment.
HAL announced its highest-ever revenue of more than Rs 29,810 crore for the financial year-ended March 2024, and has a robust order book of over Rs 94,000 crore, she said.
"Contrary to Rahul Gandhi's claim, it was the Congress party that left India crippled, relying heavily on imports rather than empowering our own institutions like HAL," the minister wrote on her private account.
India is turning from an import dependent country to that of an arms exporter, she said.
"The increased defence spending and aim of achieving 'Atmanirbharta' in defence has fuelled the growth of PSUs like BEL, HAL, Mazagon Dock, etc.," she said, adding that in the fiscal 2023-24, India exported arms worth Rs 21,000 crore.
In the case of Neelachal Ispat Nigam Ltd., Sitharaman noted that post-privatisation, there has been a perceptible turnaround in operations of the plant and blast furnace capacity ramped up.
"Not only have the operations improved, the employees have also benefitted from the disinvestment. With disinvestment, the unpaid employee dues of Rs 387 crore were paid to them," the minister wrote on X.
