COVID-19: After Attempts to Privatise, Modi Govt Depends on PSUs for Relief Funds

The union government has asked the Public Sector Undertakings (PSUs) in the country to contribute funds towards mitigating the disruptions caused by the COVID-19 pandemic and the ongoing 21 days lockdown. While numerous PSUs and their employees have already donated resources and are also providing health infrastructure facilities for the treatment of COVID-19 patients, experts are arguing that the government’s dependence on PSUs highlight the hypocrisy of current regime which has the track record of forcefully listing well performing PSUs on auction lists for privatisation. 

Furthermore, the funds from PSUs being diverted to the newly created Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) instead of the PM National Relief Fund (PMNRF) has become controversial as experts question the credibility of creating a new fund. 

“For the last six years of their regime, the Narendra Modi-led government has been keen to forcefully auction most of the PSUs such as BSNL, BPCL, etc., to private entities. But, as the COVID-19 outbreak has created an existential crisis like situation, the government is now more dependent on PSUs for funds in spite of numerous attempts to dismantle them. This reveals the hypocrisy of the regime,” said M G Devasahayam, a former Army and Indian Administrative Service officer. 

On March 28, PM Narendra Modi created the PM CARES fund as a public charitable trust, with himself as its chairman and members including Defence Minister, Home Minister and Finance Minister.

Also read: ‘Centre’s COVID-19 Relief Package a ‘Misnomer’, Fails to Address Needs of Most Vulnerable’

As Ministers have asked PSUs to transfer funds to PM CARES, Devasahayam argues that the act is illegal. “PMNRF is a public fund which has its own rules, regulations and memorandum and the account is audited by the Comptroller and Auditor General of India. But, creating PM CARES instead of utilising PMNRF lacks not only credibility but is illegal and might attract criminal proceedings,” he told NewsClick. 

PSUs have always been at the forefront in supporting the government during the events of disasters. According to reports, employees of most PSUs have pledged to donate one day’s salary to fund the government’s relief operations in containing the spread of the virus. 

The Indian Railways, the country’s largest public sector employer, pledged to donate Rs 151 crore towards the cause as earlier stated by Railway Minister Piyush Goyal. Contributions from Defence Ministry’s employees including Army, Navy and Air Force personnel totalled Rs 500 crore. Similarly, the central armed forces under Union Home Ministry have reportedly contributed Rs 116 crore. But, all these contributions are made towards PM CARES as directed by the respective ministries. 

Besides, PSUs are also providing health infrastructure specifically for the treatment of COVID-19. However, as health experts have been pointing out, India has no capacity to contain the coronavirus outbreak if the country becomes the epicentre due to lack of adequate health infrastructure. Meanwhile, the Union government has approached automobile makers urging them to produce ventilators during the crisis.

Several PSUs are joining hands with the state governments and in some cases private entities for arranging health infrastructure. For instance in Odisha, Coal India subsidiary Mahanadi Coalfields Limited and Odisha Mining Corporation have signed tripartite MoUs with the Odisha state government to set up two separate hospitals for COVID patients in the state. 

National Thermal Power Corporation has reportedly converted its 45 project hospitals and medical establishments into special units to treat COVID-19 infected people. 

Bharat Electronics Limited, a PSU under the Defence Ministry along with another PSU, have been tasked with producing 40,000 ventilators for the treatment of COVID-19 patients. Reportedly, India has as low as 40,000 ventilators presently available in the country while China’s statistics suggest that at least 5% virus affected patients need ventilators for treatment.

Power equipment manufacturer Bharat Heavy Electricals Limited (BHEL) employees have pledged to donate one day’s salary towards the PM CARES fund while BHEL units are producing hand sanitisers.

Also read: Will Centre’s COVID-19 ‘Relief Package’ Really Cost it Rs 1.7 Lakh Crore?

Power Finance Corporation Limited, a PSU under the Ministry of Power has stated that it has agreed in principle to provide financial assistance of Rs 50 lakh to Indian Red Cross Society to fight the pandemic.

HLL Lifecare, the public sector company has recently floated tenders for the production of 10 lakh coveralls and 40 lakh N95 masks. 

Public sector banks (PSBs) have also come forward to help businesses to recover from the unprecedented disruptions amid lockdown. PSBs including State Bank of India, Indian Bank, Uco Bank, Bank of India (BOI), and Union Bank of India (UBI), have announced emergency credit lines for quick loans to businesses. Similarly, Bank of Baroda has offered quick loans to its existing MSME and corporate borrowers.