Modi-led Indian government seeks corporatization of state firms

India's Prime Minister Narendra Modi wants to corporatize the state-run firms. Modi believes in enhancing viability of state-run firms rather than divesting government stake or closing down options.

Modi-led government aims at bringing efficiency and making state-run firms non-political. Indian government is concerned about the stalled projects in the country.

India improved its position by 12 places in the World Bank's ranking in 'East of doing business,' to 130 from 142.

About 85 major projects in India are not working. Majority of them didn't witness the ground-breaking ceremony at all, said Modi. About 60-65 projects such as Dabhol power plant in Maharashtra have taken off, but still some of them are not working satisfactorily.

Modi targets fiscal deficit of 3.9 percent in gross domestic product (GDP) by March 2016.

In a report published by ND TV, Modi, while questioning that do we have only two options either divest them or shut them down, said, "In our country reformists would say that you do disinvestment. If we do, then they would say this government has done very good. If strike happens, then there will be a photo on frontpage saying Modi murdabad. We have made shipping companies, which were running in losses, profitable."

Modi says India can achieve growth if Central and states work together. He sees sustainable economic recovery through combined contribution of states. He appreciated Jharkhand, Chhattisgarh and Odisha as they figured in World Bank's report on ease of doing business.

According to a news report by Live Mint, a huge country like India can't be ruled from one place i.e. New Delhi. The nation needs strong pillars of the states.

"If we adopt the psyche that Delhi is the giver and states the takers, the nation can't progress," said Modi, while calling for combined efforts of Centre and states.

The Indian government is focusing on infrastructure development and access to utilities. 3,004 villages, out of 18,000 that don't have access to electricity, have been provided with power supply.

Modi said State-run firms are leading in industry sectors such as banking, oil marketing coal segment. However, majority of them are running with excess staff. Many of public sector undertakings (PSUs) are reeling under political pressure.

Modi highlighted an example from Shipping Corporation of India (SCI), which has been making profits. After successful restructuring, SCI's net profit rose to INR1.6 billion ($23.94 million) in the quarter ending September from INR 185.0 million from the previous corresponding quarter.

Despite Modi's support to industry and PSUs, he's been facing protests from labor unions, as reported by Reuters. Millions of workers observed strike recently to protest against stringent labor laws. Several trade unions are opposing measures taken by Modi government.

On the other hand, Modi-led government is going ahead with divestment plans. It's planning offload 10 percent stake in Coal India for $3 billion.