The small minority of regular readers of this page and publication in general are undoubtedly aware that your editor is more than disenchanted with India’s 256 Central and equal number of state government promoted public sector enterprises (PSEs).
With the benefit of hindsight, it’s clear that ignorance of ancient India’s glorious tradition of free enterprise which had enabled the growth and development of the subcontinent into the world’s wealthiest region accounting for 20 percent of global income and output, and diversion of national savings into white elephant PSEs was a disastrous mistake. In 1969 it was compounded by nationalisation of the country’s 28 major banks by prime minister Indira Gandhi. Transformed into happy hunting grounds of the neta-babu brotherhood and managed by corrupt clerks ill-schooled in the fundamentals of banking business and practice, government banks have ruined the Indian economy by continuous denial of timely credit to industry and excessive risk aversion. Unsurprisingly, India’s public sector banks are among the world’s worst performers with NPAs (non-performing assets) averaging 15 percent of advances.
According to a Business Today graphic report (July 24), India’s banks lost Rs.100 crore per day to fraudsters during the past five years with PSBs (public sector banks) defrauded of 80 percent of a total amount of Rs.5 lakh crore. Although it’s woke to criticise the BJP/NDA government at the Centre for numerous acts of commission and omission, one of its most welcome decisions is to privatise PSBs, starting with two this year. Yet it’s doubtful whether this declaration of intent will be implemented. The neta-babu brotherhood has too much to lose.