Prime Minister of India - Dr. Manmohan Singh

PM's remarks at the SCOPE Excellence Awards function

It is a real pleasure for me to be amidst you today on this very happy occasion of the presentation of the MOU Excellence Awards and SCOPE Awards for Excellence and Outstanding Contribution to Public Sector Management. Let me begin by congratulating the award winning organizations and their Chief Executives. I hope their performance will inspire others to higher achievements. I wish the award winners even greater success in years to come.

This award function is, in a way, a celebration of the achievements of our Indian public sector. It is being held against the background of a global economic slowdown, which has affected the large part of the world and which has shown some signs of moderating only now. As you all know, India has weathered the slow down better than most other countries. Ours today happens to be the second fastest growing economy in the world. This is a reflection in large measure, of the strengths of the Indian economy, one of which is a robust and reliable public sector. I hope our Public Sector Enterprises will continue to play a very significant role in processes of nation building, as they have been doing all these years.

I recall that when we began the process of liberalized our economy in the early nineties, many experts were of the view that our Public Sector Enterprises would not be able to face local and increased global competition. Many years down the line, these fears and apprehensions have proved to be unfounded. Our Public Sector Enterprises have done quite well and they are now poised to grow even faster in years to come. In the post reform period, i.e. 1990-91 to 2007-08, their turnover increased nine times and their cumulative net profit has grown more than 35 times. Though some of them have not done so well in this period, on the whole, we have reasons to be confident about the ability of India's public sector to operate in an increasingly open environment and thereby face the challenge of increased competition both domestically and globally.

There is no denying the fact that Public Sector Enterprises are here to stay in the Indian economy. Some of them have shown sustained profitability and good consistent performance. The listed ones on the Stock Exchanges account for more than 24 per cent of the total market capitalization of the Bombay Stock Exchange (BSE). In terms of market capitalization, of the top-10 listed companies on the BSE, 5 are Public Sector Enterprises. More and more Public Sector Enterprises are entering the capital markets and are striving to become active global players. Over the years, the number of Public Sector Enterprises making profits has steadily increased while the number of those which are loss making has been on the decline.

I recall that the last time I addressed this distinguished gathering in 2007, I had dwelt on three important issues which merited greater attention. These related to the listing of shares of Public Sector Enterprises on the Stock Exchanges, corporate governance standards in them and performance of State level Public Enterprises. It gives me satisfaction to note that our country has since become one of the very few countries in the world which has implemented a Code of Corporate Governance for its Public Sector Enterprises. A number of Public Sector Enterprises have since got their shares listed on the stock markets and many more are eager to do so. This is a measure of the increased vitality of our public sector. This also shows that they are not shying away from the processes of market scrutiny and that they are ready to face new challenges in an increasingly competitive world. I am also happy to know that both the Department of Public Enterprises and SCOPE have taken initiatives to strengthen the management of Public Sector Enterprises to enable them to improve their performance. But we cannot be satisfied with the status-quo. We live in a world where science and technology are creating an environment where human knowledge is increasing at an unimaginable fast pace. If India is to regain its place in the comity of nations, then there has to be sustained efforts on our part to improve productivity, to pay increasing attention to research and development and to operate on the frontiers of modern scientific and technological knowledge.

Let me state once again today that our Government is committed to giving our Public Sector Enterprises the flexibility and autonomy they require to operate effectively in a competitive environment. We have delegated more powers to the Boards of Navratna and Miniratna companies in order to facilitate further improvement in their performance. We have also implemented revised salaries for executives of Public Sector Enterprises and we have introduced innovative measures such as performance related pay. The incentives for the employees have been linked to individual, group as well as company performance. We expect all this to lead to sound practices for the development of human resources, which are of critical importance in today's competitive environment. Our Government is encouraging the listing of Public Sector Enterprises on the stock markets as this would unlock the true value of a company, improves its corporate governance standards and also help it in raising resources for funding future expansion plans. As far as sick and loss making organisations are concerned, we have made efforts to restructure and revive them, wherever this is possible. An amount of Rupees 15250 crore has been provided by the Government in the last 5 years or so as cash and non-cash support to 36 such enterprises. We will continue to take steps to strengthen the public sector to enable it to play the role expected of it in a modern, fast growing economy.

Let me conclude by once again complimenting the award winning organizations. I urge all of you to contribute to the strengthening of our public sector. Indeed, by doing so you will be strengthening our country. I wish all of you the very best. May God bless your efforts.