Letter to BS: Govt creating illusion of strength but reality is different

The government is facing problems of mounting fiscal deficit with much lower than expected GST and other tax revenues, losses incurred by its enterprises such as Air India, MTNL/BSNL and PSB banks

This refers to “Govt’s ingenious ways to milk the PSUs” (September 16). The government is facing problems of mounting fiscal deficit with much lower than expected GST and other tax revenues, losses incurred by its enterprises such as Air India, MTNL/BSNL and public sector banks (PSBs) etc and increasing expenditure on welfare schemes. It is working on various ways to create the illusion of a financially strong government. Besides adopting the cross-holding model in PSUs, milking the Reserve Bank of India and parking government expenditure under PSUs, it is increasingly using LIC to lend to and invest in loss-making banks, PSUs and corporates like Infrastructure Leasing & Financial Services Ltd. The interests of minority shareholders in PSUs and LIC policy holders seem to have been completely sacrificed at the altar of political expediency and creating an illusion of well-being of government finances. One has to just read the latest Comptroller and Auditor General of India report to get an idea of what is happening.
 
Arun Pasricha, New Delhi
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