دانلود رایگان مقاله انگلیسی تعهدات بخش عمومی - امرالد 2017

Abstract

Purpose: While national public policies such as performance contracts and disinvestment affect the dynamics of large- and medium-scale state-owned enterprises in emerging market economies, the purpose of this paper is to analyze the performance of India’s public sector undertakings (PSUs) and suggest options to improve their outcomes. Design/methodology/approach: Using firm level data on India’s 235 PSUs with total assets of around $500 billion over the past two and half decades 1990-2015, the study empirically tests the effect of performance contracts, measured by memorandum of understanding (MOU) and disinvestment, measured by private equity share, on PSUs performance indicator such as return on capital (ROC). Data were collected from the Public Enterprises Survey Reports released by the Department of Public Enterprises under India’s Ministry of Heavy Industries and Public Enterprises, Department of Disinvestment, BSE, and Capitaline database. By controlling firm, industry and macro level factors in regression models, the results were presented in several aspects like service sector, non-service sector, and individual and joint effects. Findings: Empirical estimations indicate that performance contracts such as MOUs have had a positive impact on PSU performance by increasing their ROC by 8-9 per cent. This result holds more strongly for the non-service sector (manufacturing, mining) but less so for service sector firms. In the case of service sector firms, partial privatization (share sales) has a significant impact on performance, making them ideal candidates for more aggressive disinvestment. Larger PSUs (Maharatna’s) appear to perform better than smaller PSUs and even better than private firms of similar size. Smaller PSUs (Navratna’s and Miniratna’s) perform worse than private companies and should be good candidates for strategic disinvestment (privatization). PSUs that do not have Ratna status – and are loss makers should be disposed of their asset value. Practical implications: The study recommends that India should change the public sector balance sheet by raising capital through strategic disinvestment (privatization), disinvestment and liquidation of PSUs and re-investing it, in public infrastructure through the National Infrastructure Investment Fund and not into the budget as a revenue raising measure. It should also transform Maharatna’s into world class companies with greater commercialization. Originality/value: The paper makes significant contributions to academic literature on the changing dynamics of state-owned enterprises in emerging economies by examining the effect of performance contracts and disinvestment on India’s PSUs performance. It is one of unique longitudinal-empirical studies on India’s PSUs performance in several dimensions.

4. Conclusions

A bolder roadmap for gradually getting the government out of the business must be prepared with a hard look at the real economic benefits from some of the profit-making stateowned firms as well. The question to be asked is, are these firms locking up scarce capital to provide employment for a few, or can they become strategic world class companies?

For now India could leave the Mahartana’s which hold about one third of total assets of all PSUs in state hands, but with a plan to make them world class companies. Choudhury and Khanna (2014) showed the case of public R&D laboratories how this could be done. But the remainder, especially those in the service sectors could be privatized or sold off for their assets. This could raise capital up to $250 billion over the next ten years for other uses such as investment in public infrastructure.

Such a bold approach to transferring state-owned assets with generally low return towards public social infrastructure is a win-win idea, especially because the private sector will improve returns. The second gain is, it will unlock funds for building badly-needed social infrastructure—roads, power transmission lines, sewage systems, irrigation systems, railways and urban infrastructure. This will also help draw in private investment, including foreign direct investment.