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Rescuing India's PSU behemoths coming at the cost of fiscal restraint

Modi has received more than $28 billion from state firms since he came to power in 2014, by extracting dividends or getting PSUs to buy out the government's stake

Topics
public sector borrowings | fiscal deficit | PSUs

Karthikeyan Sundaram & Anto Antony | Bloomberg 

For years India’s state-run companies coughed up hefty dividends when the government needed cash. Now the treasury is being forced to return the favor.

Prime Minister Narendra Modi will spend about $9.5 billion to resuscitate telecom firms Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd., Telecom Minister Ravi Shankar Prasad said at a briefing last week. The government is already pumping 300 billion rupees of tax payers’ money into state-run Air India Ltd., while fighter-jet maker Hindustan Aeronautics Ltd. has been borrowing to pay employees this year after ...

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First Published: Thu, October 31 2019. 11:22 IST
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