This refers to the Rajiv Lall's article "Privatisation not a panacea for PSU banks" (September 11). The example of Jan Dhan Yojana is relevant if one has to find the reasons for the inefficient functioning of public sector undertakings (PSUs) in general. The abuse of PSUs for achieving near-term political mileage is not new. But, as the article asserts, such misuse has a cost in terms of profitability, efficiency and workforce morale.
There has been a concerted effort from vested interests to belittle the achievements of India's public sector, which had been nurtured by successive governments till the late 1980s. The railways, post, defence production, atomic energy, oil sector, space research and banking - all our public sector organisations were doing well. If only they were given a level playing field when the private sector was welcomed to participate in captive areas, India's growth story would have been different.
Why private sector banks in India have not been able to improve their share in India's banking should be probed before arguing for privatisation of PSU banks. Private sector banks are still reluctant to accept small depositors or borrowers as clientele in urban areas, not to mention their unwillingness to reach out to rural areas. Ideally, the government should not bring down its ownership share below the current level. Investment in PSU bank capital should be made attractive by showing that they can also function like their private sector counterparts.
M G Warrier Mumbai
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