Economic Survey 2020: PSUs turn efficient wealth creators in private hands

Economic Survey 2020: Privatisation has led to Central Public Sector Enterprises (CPSEs) generating more wealth from the same resources, given these companies turned around the return on assets and profit margins from negative to positive after going private, according an analysis which is part of the survey. This, the survey said, bolstered the case for aggressive divestment of CPSEs.

As a case in point, the survey noted that recent approval of strategic disinvestment in Bharat Petroleum Corporation Ltd (BPCL) led to an increase in value of shareholders’ equity of the oil marketing company by Rs 33,000 crore when compared to its peer Hindustan Petroleum Corporation Ltd (HPCL). The approval was granted in November last year for strategic disinvestment of government’s shareholding of 53.29% in BPCL.