Prime Minister of India - Dr. Manmohan Singh

PM’s speech at the MoU and SCOPE Awards Function

The MoU and SCOPE awards function is an occasion for all of us to recognize and applaud the achievements of some of our best performing Central Public Sector Undertakings. It is also an occasion to acknowledge the important contribution of our the public sector to the national economy ever since our independence. I have great pleasure in participating in this event for the fifth time as Prime Minister. I congratulate the award winning CPSEs for their exceptional performance and I sincerely hope that they will do much better in years to come. The high standards they have set will surely inspire other public sector enterprises to perform more efficiently and productively in the service of the Indian people.

The Central Public Sector Enterprises have continued to play a very important role in our national economic activity ever since our independence. They bore a very large share of the responsibility of industrialization of our economy in the formative decades after 1947. And they remain critical to the processes of nation building even today.

The number of CPSEs which was 5 on the eve of the first Five Year Plan stands today at 250 today. They have amongst them the largest turnover company of India in Indian Oil Corporation Limited, the most profitable company in the Oil and Natural Gas Corporation, the largest public utility company in National Thermal Power Corporation and the company with the highest market capitalization in the Coal India Ltd. Some of these companies figure in the 500 biggest companies of the world.

Our government stands committed to a strong public sector in the our country. We are of the clear view that both public and private sectors need to work together and complement each other to meet the demands of our rapidly growing economy. Our country needs huge amounts of investment, both public and private, particularly in the area of infrastructure. Public investment is particularly needed at a time when the country is facing a difficult global environment, and looking to domestic drivers of growth. I am extremely happy to learn that 17 of our largest CPSUs have committed to investment plans amounting to Rs 1,40,000 crore in the coming year. I would encourage the remaining Central Public Sector Units also to similarly pay attention to boosting the capital investments. These efforts must also be properly reflected and rewarded through the MoUs.

Investment in Central Public Sector Units is concentrated mainly in manufacturing, mining, electricity and services. According to the Public Enterprises Survey (2009-10), the turnover of both the manufacturing and mining sectors declined in 2009-10 over the previous year. This is a reflection of the difficult economic environment that we face. Notwithstanding these difficulties, we must step up our performance in mining, particularly in the production of coal, petroleum and natural gas. The policy on acquisition of raw material assets abroad has been approved by the Cabinet recently. I would urge our Central Public Sector Units, especially those in the field of the mining, to seriously explore opportunities for such acquisitions.

We also need to perform much better in manufacturing. We must increase the share of the manufacturing sector in our GDP from the present unsatisfactory level of 15%. The Central Public Sector Enterprises have a significant presence in areas such as machine tools, heavy transport, earth moving and mining equipment, shipbuilding, defense equipment, aerospace, heavy electrical equipment and nuclear power generation. I would urge the Central Public Sector Enterprises in these areas to embark upon ambitious plans of expansion to make the target of 12 to 14 per cent growth in the manufacturing sector a living reality.

Our Government remains supportive of those public sector enterprises which need assistance to become viable again. The Bureau for Reconstruction of Public Sector Enterprises was set up in December, 2004, and since then revival proposals of 43 CPSEs have been approved. It is a matter of satisfaction for all of us that 24 of these CPSEs have posted profits, and 13 of them have turned around, that is, they have been in profit continuously for three years or more. I am also happy that the Department of Public Enterprises and SCOPE have both recognized the efforts of these CPSEs through the MoU Excellence Award for the best Turnaround Company and the SCOPE Gold Trophy in the Turnaround category respectively.

To stay competitive in these times of rapid change, the Central Public Sector Enterprises need to focus on good corporate governance, strategic planning, innovation, Research & Development, and greater attention to quality control. They should also have the required functional autonomy. I am happy that both the Department of Public Enterprises and SCOPE have been organizing workshops and seminars to create awareness about the best management practices in the corporate sector. The government is also been periodically looking at the need for reform in the functioning of the Central Public Sector Enterprises. The introduction of the MoU system was the result of such an examination. This was followed by the conferment of the Navratana and Maharatna status upon certain Public Sector Enterprises, with greater delegation of financial powers. But, we can not be satisfied with the status quo. Our government will do whatever is required to make the CPSEs stronger and more competitive.

With these words let me end by once again congratulating today's award winners, and by wishing the Central Public Sector Enterprises all the very best for the future.