A road map for PSUs

Time to address the bigger underlying issues

Debt in public sector undertakings (PSUs) is on the rise. As reported by this newspaper on Monday, the average debt-equity ratio in a sample of 40 listed non-financial PSUs went up by 10 basis points, year-on-year, to a new high of 0.68 in FY19. The ratio has worsened for the third consecutive year. The balance sheet of the private sector also deteriorated, partly because of unfavourable earnings, marking a reversal in the deleveraging process. While this could affect revival in investment, weakening PSU balance sheet will have implications for government finance as well.
 
The combined borrowing by PSUs went