India PSU employment declining 4.3% per year

The total number of people employed by various undertakings and companies controlled by the central government has been showing a decline of 4%-5% per year in recent years.

According to numbers from the ministry of heavy industry and public enterprises, the total number of personnel in central public sector enterprises fell by 4.2% in 2015-16 to 15.21 lakh from 15.87 lakh in the previous year.

In the previous year, the decline was to the extent of 6.2%. The total number of PSU employees fell by 1.04 lakh in that year to 15.87 lakh.

Similarly, in 2013-14, the total number of PSU employees fell by 2.5% to 16.91 lakh.

Taken together, the average annual decline in PSU employment during the three years is 4.27%.

The numbers do not include those under state-government controlled enterprises.

The decline is largely along expected lines as government companies continue to lose market to private sector enterprises as the latter are considered to be more efficient, and therefore produce goods and services cheaper than their government counterparts.

Among the biggest PSUs that have seen sharp declines in employment are telecom majors BSNL and MTNL, a large portion of whose employees are now grey-haired.

Many manufacturing companies, such as Steel Authority of India, too have downsized due to lower demand for their products in the market.

The ministry said employee decline is on account of various factors such as retirement, attrition and Voluntary Retirement Scheme (VRS), Voluntary Separation Schemes (VSS) and so on.

It said the central government does not interfere in these aspects.

“The manpower planning and deployment in CPSEs is aligned to the objectives and targets of their business plan, prevailing business conditions & requirements and other factors like future operations, expansion / investment plan etc,” it clarified.

India is transitioning from a heavily controlled, Nehruvian economy to a more liberal one where people are free to start any business and compete with established businesses.

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