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Rethinking PSE Policy

  • IASbaba
  • May 19, 2021
  • 0
UPSC Articles
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HEALTH/ GOVERNANCE

Topic:

  • GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Rethinking PSE Policy

Context: Recently, the government said that it will be using three public sector enterprises (PSE) for manufacturing Covaxin to augment the manufacturing capacity under Mission COVID Suraksha. These were 

  • Haffkine Biopharmaceutical Corporation Ltd, a State PSE under the Maharashtra government;
  •  Indian Immunologicals Ltd (IIL), Hyderabad — a facility under National Dairy Development Board; 
  • Bharat Immunologicals and Biologicals Corporation Ltd (BIBCOL), Bulandshahr, a CPSE under the Department of Biotechnology.

This has revived the debate on the relevance of PSEs

  • Cannot entirely do away with PSEs: Since Independence, PSEs have played a pivotal role in realising the objective of achieving higher growth and equitable socio-economic development of the country. So to say the government has no business to be in doing business perhaps needs to be revisited
  • Crucial Role in testing times: PSEs in the steel, petroleum and natural gas sectors have supplemented the efforts of the government in making available liquid medical oxygen as well as transportation of it.
  • Contribution of PSE Employees: PSEs by their inherent work culture spend a lot of time and resources in manpower training and developing expertise. Former public sector employees, after retirement or having quit jobs and then joined private sector, have given the right kind of impetus to the industry, particularly the core sector of the economy. 

Importance of Pharma PSE

  • Self-reliance: The public sector drug companies were established with a vision to make the country self-reliant in producing medicines needed for the people of the country 
  • Free & Fair Market: Strong presence of Pharma PSEs helps save an industry like the drug industry from the clutches of MNCs and the private corporate sector.
  • Ensures affordability during crisis times: Pandemic has resulted in loss of imports from China. This directly resulted in escalation of prices of everyday medicines like paracetamol in the Indian market. Expansion of Pharma PSE units at these times will make medicines affordable.

Way Ahead

  • There is a need to revisit the PSE policy, but more in terms of their functioning — by empowering the boards of these entities, making them more autonomous. 
  • These companies should be run by a professional board without government interference. These PSEs could be run under the PPP model or as JVs too. 
  • Board members should be highly respected, knowledgeable, and from industry, management, finance and research fields.

Connecting the dots:

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