why India need its White Elephants

There has been a huge usurp in the public and especially political economists on the disinvestment of public entities especially LIC. Out of the blues, LIC can be starring at some potential losses in its customer base owing to Government's double blow. First, the disinvestment of LIC and second the introduction of new income tax slabs and rules which have no room for tax benefits (although the older income tax slabs will continue). The Government has gone haywire on disinvesting and even the advocates of the same have been worried about the pace at which Government is disinvesting. 

This was just an example of a flourishing public entity. But the big focus was on Air India, the Government owned entity for years. The Maharaja has some great achievements to its name. The Airlift of Kuwait, the world's largest evacuation program is the rarest of the rare feat of Air India. But the entry of private players and mismanagement on part of the Government has made Air India a white elephant. 

Another story of a thriving public sector gone white elephant is the once undisputable telecom giant BSNL. BSNL has a subscriber base of approximately 119 millions. The network coverage of BSNL is undisputable. the huge network that BSNL provides is unmatchable especially in rural areas. It has acted as a bridge to reduce the digital divide between rural Bharat and urban India. But since 2009, BSNL has been running in losses and has not seen profit for more than a decade now.  

A picture depicting state of BSNL
source Google images


BSNL to be bitterly honest fell due to two main reasons. One, it own poor customer service which was running in still old way of hefty paper work and a pathetic customer service. Second, Government apathy. Perhaps, the second reason was more crucial in denting BSNL. 4G revolutionized India in 2016. We are now entering 2021 and BSNL is yet to launch its 4G. I mean how pathetic it would be for a telecom giant to delay its 4G services when the whole world is gearing up for 5G. The delay from Government side, vendors issue coupled with boss culture led this thieving giant to convert itself into a burden. 

Why such requirement?

The big question is why India require such burden laid establishments? The answer lies in global competition as well as India's socialist outlook. During the time of crisis, it is only these establishments that Government relay upon be it the evacuation programs or providing telecom service during the time of disaster like Kedarnath. Private companies main motto is profit. They will only approach the area or sector if it is profitable. During Amarnath yatra in the initial years of mobile services, only BSNL was providing services. Airtel only entered the fray only when the profit was visible. Similarly, there were villages till 2016 where Airtel, Rcom, vodafone, Idea was reluctant to provide coverage due to proximity to borders or peanut profits. 

A Company with a Global footprint

it is desire as well as requirement of an entity which has a global footprint. Take the example of Shell, the oil giant from U.S backed by the Government. The role it acquired in 1980's was so huge that it literally could manipulate the policy of a nation. Latest example is the Chinese backed Huawei telecom which has mastered 5G. It has literally rocked the world and challenged the domination and possibly on the verge of replacing the top giants in the sector. Huawei as of now is undisputable in its 5G roll out. When we take the case of India, we literally see no such company. BSNL should have its own R&D backed by some DRDO type labs to create state of the art technology and not depend on some irresponsible Chinese equipment like ZTE. BSNL as such should propose on creating at least 3 labs Pan India with a total scientific base like that of ISRO, DRDO and other such agencies. Such Government backed entities will not only help public but also will be handy for creating state of the art infra for defense sector.

In case of Air India, some specializations could have been created like the Government has introduced newly project Rupee Raftar to produce aircraft and collaborations with HAL, BHEL like agencies could had been established to produce aircrafts of world class competence and go one to next step to compete with world leaders in aviation like Airbus, Boeing. But, instead of equipping, the Government went to sell the Maharaja.

Depiction by a newspaper on sale of Air India


These are mere examples from two of the major sectors in India. There is a lot more to it like the health sector, mobile industry where government can bring its machinery and coordinate to produce products not only for India but in demand for the world. India has the capacity to turn its white elephants into a strategically important companies. If banks can be labelled as strategically important ones, then India has the capacity to product such industry. Recently, HAL's and DRDO's Tejas has been opened for sale. It is only a matter of willingness to flood the world with world class equipment and products and make the tag Made in India a reality and a global power house.  

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