Speech by Her Excellency the President of India, Shrimati Pratibha Devisingh Patil, on the Occasion of the Public Sector Day

Ladies and Gentlemen,

It gives me immense pleasure to participate on this momentous occasion of the first ever Public Sector Day. I complement the Ministry of Heavy Industries and Public Enterprises and SCOPE for having taken this initiative. Today, the 10th of April, is significantly also the day when in 1973 SCOPE was formed. I am sure that the events organized at the Public Sector Day, in the years to come, will provide a forum for an appraisal of the functioning of our public sector enterprises by taking stock of their contribution to the growth of the country as also looking for responses to the challenges that they face.

To appreciate the contribution of Public Sector Undertakings (PSUs) it may perhaps be useful to understand the rationale of their establishment and their evolution. At the time when we became a free nation, we were faced with the challenge of finding the resources, institutions and instrumentalities for creating basic national assets and infrastructure. The vision was to build a nation that had a strong industrial base which served the socio-economic well-being of the people of the country. It required projects that had a long gestation and where profitability was low. This had to be achieved against the background of a lack of adequate capital as well as limited entrepreneurship skills. It was in this context that Public Sector Enterprises were set up to meet the immense task of facilitating the industrial development in the country in a manner that no region was left behind in the process.

Starting with a modest investment of Rs. 29 crore in 5 enterprises on the eve of the first Five Year Plan in 1956, enterprises in the Public Sector have steadily progressed to 246 in number with an investment of Rs. 5,29,950 crore till 2009. During this period, they have been reliable partners in advancing growth in the country. They remain relevant as they have demonstrated the ability to adjust to the changing environment. They will continue to be important if they take steps to keep their performance under constant review as also strive for efficiency and competitiveness.

Our PSUs have successfully undertaken course correction, when faced with a situation that required them to do so, I recall the period in the early 1990s when India begun the process of liberalizing its economy. There was a feeling then that our PSUs may not be able to withstand the intense competition that would ensue from domestic and global firms. These fears turned out to be unjustified. Many companies in the public sector have proved themselves to be wealth-creators and profit-generators. In recent times, the credible performance of public companies in the stock market shows the public confidence in them. Some have also emerged as effective players in international markets. The 2009 Forbes Global List of 2,000 companies includes 47 Indian companies, among these 25 were Indian public sector companies. This trend is encouraging and they deserve complements for the same. The effort to be globally competitive should continue.

The last two years were when during the global crisis, economies of many countries slumped, faced with negative growth rates. We were affected but yet last year we touched a growth rate of around 7 percent. Even though this fell short of our targeted growth rate, we were the second fastest growing economy in the world. This is a reflection of the increasing strength and resilience of the Indian economy, of which the public sector is a component. This shows that our PSUs are ready to face every challenge, and have the capacity to be the facilitators of growth. They have proved that they are an essential part of the backbone of the economy.

I am confident that in the coming years, PSUs would aim at sustained profitability and will consistently give good performance. For this, they should adopt best practices of management and keep themselves abreast of market orientation. Also, of criticality in this regard would be increased attention on Research and Development. This is particularly vital in today's knowledge based society, where productivity and performance can be enhanced, with the use of various tools and inventions of Science and Technology. I would in particular like PSUs to innovate and see whether they can partner with the agricultural sector to enhance farm productivity, especially in rainfed areas. I think they should accept it as a challenge and show that they would not lag behind in accepting this challenge. An individual farmer is basically a private entrepreneur, so a combination of private entrepreneurs and PSUs working together, will turn out to be a great venture. To begin with, this can be a part of a social responsibility and later become a viable business model.

There can be no doubt that amongst the factors that impinge on the performance of any company, Corporate Social Responsibility and Corporate Governance are of key significance to both the public and private sector. A business does not function in a vacuum or in an isolated fashion. It draws upon natural resources and utilizes the human capital of a nation. It, therefore, owes a responsibility to undertake its operations in a manner that are least damaging to the environment and to seek to maximize benefits to society. Social responsibility is the very essence of the PSUs. It was especially with this motive that these were set up and a large amount of public funds were invested. There is, therefore, a huge responsibility on them to excel in their fields and through their work to serve the national goal of socio-economic development. It should be their endeavour to maintain high level of standards so that these become best practices in the industry, setting benchmarks for other companies to emulate.

The reputation of an organisation depends upon the strength and values of its personnel. There should be continuous efforts to upgrade human resources through skill development, attitudinal change and team building, including through more women in the higher echelons of PSU management. Adherence to high standards of Corporate Ethics will make the enterprises stronger and sustainable. India's sustained economic growth requires that all stakeholders, both in the public and the private sector, contribute their very best, so that there is overall development in the country.

I take this opportunity to felicitate the Chief Executives and employees of PSUs who have received the SCOPE Meritorious Awards today. These awards are recognition of the excellent performance of their companies. I am sure that these awards will further motivate all of you to work even harder, so that the expectations of the people can be fulfilled.

I wish to, once again, congratulate all of you for organizing the first ever "Public Sector Day" today. It's a brilliant idea!

Thank you. 
JAI HIND.