In one way the correct meaning of PSE is - Profit and Social benefit generating Enterprise: PM Modi at CPSE Conclave
For public and private sector, the formula of success remains same - the 3 Is, which mean Incentives, Imagination and Institution Building: PM
I believe that Idealism and Ideology are not enough for economic decision making, they need to be replaced with pragmatism and practicality, says the PM
PSEs can contribute towards the formation of New India through 5 Ps - Performance + Process + Persona + Procurement and Prepare: PM
To date, we have been treating PSEs as navratana companies. But now, its time to think beyond it. Can we think about making New India jewel, asks PM

My colleague Heavy Industries and Public Enterprises Minister Mr. Anant Geete, Minister of State Mr. Babul Supriyo, my colleagues Mr. P.K Mishra and Mr. P.K Sinha, senior officials of the Central Public Sector Enterprises who have come from across the country, other dignitaries present here, ladies and gentlemen.

Anant Geete ji doesn't sing but Babul ji sings. This is a new beginning of the small world of the public sector. I welcome you all at the CPSE conclave. I congratulate you all. I could clearly see your diligence, enthusiasm and by and large your clarity of thoughts in the presentation given in the past 1-1.5 hours. I got the opportunity to get a glimpse of your vision and thoughts on various aspects ranging from corporate governance to innovation, technology and New India. I don't know whether any former Prime Minister has ever got a similar opportunity!

I would also like to congratulate all those who were involved in the discussions and were associated with the presentation team. They must have had a deeper discussion and collected many references. They must have got the opportunity to think out of the box.

I am told that you have been engaged in a detailed discussion for the past few months. You have done a lot of research in order to get a transformative change in your related sectors. Even I try to incorporate my thoughts in your discussions and some of your subjects so that there could be a balance of thought between you and me. In a way everyone has contributed in some or the other way in the process of discussion and debate.

Several day-to-day challenges faced by you have been discussed upon. The government is ceaselessly working to overcome these problems. In the last 4 years, the government has also given operational freedom to the Institutions of public sector so that they perform better.


The public sector undertakings have made significant contribution to the country's economy for nation building after independence. At that time India was in need of funds, technology and investment in different sectors. It was not easy to get these things. Therefore, at that time the public sector enterprises helped the country to meet these requirements. A number of good brands came up. These Enterprises had their domination over several sectors like power production, designing of the equipment related to power, steel production, oil, mineral, coal and so on. At the time when private sector had not proliferated, you had expedited the process of economic growth. Even today, you are not only strengthening India's economy but also acting as a catalyst to the industrial activities.


Usually assessment of a CEO of a private company is done on the basis of profit earned by him for his shareholders. Profit is also important for public sector enterprises, but at the same time they have to take into consideration the welfare of the society.

We cannot keep ourselves limited. We have to take into consideration of the entire society. In a way, PSE actually refers to Profit and Social benefit generating Enterprises. This means they should not only generate profit for the shareholders but also generate benefits for the society. We cannot forget about the contribution and the sacrifices made by the PSE staff and all the officials when we talk of social benefits. You have to face a lot of difficulties while working in difficult areas under difficult circumstances where there is lack of facilities. Yes you are determined.

The government is able to take big decisions as a result of your courage. It would not have been possible without your hard work, be it providing electricity to every village of the country or providing LPG connection to the mothers and the sisters. We have also seen the scope and the time frame of the work in the presentation.


We cannot be satisfied with a good and a rich history in this era. There is a need to make changes for facing the present challenges. I believe that idealism and ideology are not enough in economic decision making. Pragmatism and practicability should also be taken into account. In the 21st century economy Innovation and Enterprise should be the mantras that will guide and be the driving forces for any sector.

There are no separate mantras for the success of private sector or public sector. When I think of success mantra, the concept of three ‘I’s comes to my mind. These three ‘I’s are: Incentive, Imagination and Institutional building. Economists say that incentives are one of the greatest tools for bringing change in human behaviour not only in business but also in our lives. We usually see that if we want a person to work up to his potential, we try to motivate him. Similarly, even you have to come up with unique incentive models so as to get rid of procrastination and stagnation. Incentives need not always be financial. The photo of the best performing employee can be put up on the bulletin board or just a pat on the back by the Chairman can also do wonders in motivating employees.

I clearly remember that once I went to a pharmaceutical company in Baroda. Whenever a product was made, its description was publicized and the employees were asked to name the product. A competition used to be organised. Even though the employees were not scientists, they used to search for an apt name enthusiastically for which they were rewarded later. Their contribution was equally important as that of the scientists. Therefore, there is a need to think in terms of providing incentives and the manner in which those should be provided. You know how these things are used in families. It has to be taken forward with a feeling of togetherness.

The second thing I have mentioned is ‘Imagination’. It has taken a different form altogether since the time the PSEs were formed. Several successful private companies would not have sustained for two decades. It is a fact. There may be a number of reasons. But the major reason is not being able to adapt to the upcoming changes in the future, especially in the field of technology. Here, the imagination of leadership comes handy. I have stayed in Ahmedabad for several years. There was a time when the big chimneys of the Mills used to be of great magnificence. Due to lack of new technology it spread everywhere. But today not a single chimney gives out smoke. Why? This was due to lack of imagination. There was a habit of living on outdated things. Those who cannot adapt themselves to the changes by making transformation, or do not have a long-term vision or cannot take decisions are the ones who remain stagnant. Gradually they are headed towards destruction. Today, diversification has become extremely important.

Thirdly, Institution building is one of the greatest tests of leadership. I am not talking about political leadership. All the people present here are leaders in their fields. They have to provide leadership in the entire field of work. A Team should be formed centred around a proper system. Individual-centred systems do not last long.


Till date we have been classifying PSEs as Navratnas. It's high time that we classified them as 'New India' Ratnas that will help in building a New India. Are you ready to make changes in technology and processes to become and make 'New India' Ratnas?

I believe your participation in the creation of a New India will be more effective by following the 5P formula. The 5P means - Performance, Process, Persona, Procurement and Prepare.


All of you have to elevate your benchmarks for operational and financial performance in your institutions. You have to prepare yourselves for competing with the world's best companies in your respective sectors. Today it is being said that India will be a 5 trillion dollar economy in a few years. India's Public Sector Enterprises have a major role in achieving this goal by improving the GDP growth rate.


I was told that Net Value Addition by the PSUs in the period 2017-18 was about 5%. It is the need of the hour to double this figure. Your collective efforts should be in this direction so that the PSUs become the third arm for revenue generation after direct and indirect taxes.

There is a saying - 'Udyogsampannam saamupaiti Lakshmi' which means that Lakshmi goes to industrialists. It is important for the PSUs to be prosperous for the welfare of the country.

Today, the Return on Equity of all the PSEs of the government is about 11%. It is lower than that of the private sector and is low for a good business venture. It is extremely low in my opinion. Therefore, I would like the CPSE management to make the necessary decisions and try to increase it by adopting a definite strategy.

Similarly, the second 'P' is 'Process'. The process should bring about transparency, accountability and should deliver more effectively in a global scale.

We should ask ourselves that how the Indian PSUs will achieve Global greatness in the next 5 to 10 years in New India. How the PSUs should bring more innovation, redefine them to increase the GDP and change their policies to increase tax revenue so as to open new avenues for employment? I believe there is a need to think on these lines.

It is indispensable for the Public Sector Undertakings to be competitive in this Global scenario. You must have seen that the public sector enterprises of several European countries are doing well in the areas of power, atomic energy and solar energy. We can also learn a lot from their working model.


The way the business environment has transformed globally there is a need to incorporate flexibility along with speed in decision making. In the past there have been many such instances when the government Enterprises have suffered due to the lack of risk taking. In such a scenario, decision making should be streamlined at every level. Therefore, the next ‘P’, i.e. Persona becomes important.

Better decision making can only work if we have a talent pool. We have to ensure that the right talent is being carried forward and whether we are able to create bench strength.

One is bound to progress if one incorporates 3 things i.e. flexible decision making, good talent and technology. I am told that you, in your presentation, have mentioned about the priority given to Tech-up India mission in order to increase innovation in the field of Technology. It is highly commendable and I wish success for this endeavour.

Procurement is also important. Friends, changes in procurement policy can strengthen the country's Micro, Small and Medium Enterprises - MSME. I wish to present a fact before you. The PSUs had procured more than Rs.1, 30,000 crores in the year 2016. Out of this, the purchase of only Rs. 25,000 crores was made by the MSME sector. Can't you all frame a mechanism by which more and more goods can be purchased from the micro and small industries of the country? You can help especially by hand-holding of the Industries in the backward regions of the country.

You must be aware of a scheme of the government of India i.e. Government e-Market (GeM) portal. You have also mentioned this in one of your presentations. It is a good system. It has instilled new energy in the MSME sector. In a short time, business worth Rs 6500 crore has been done on this online platform. If you use this platform more and more, it will not only bring transparency but also benefit the MSME sector. When you buy more and more item from the small entrepreneurs of our country, new opportunities for employment will open up in remote areas.

Besides, the more these MSMEs get funding and technical assistance from your organizations, the more will they get stronger. Capacity building of the MSME sector should be one of your goals. Probably you have mentioned this in your resolution today. The more you share your experiences with the small industries, the more will these progress towards making the country self-sufficient and self-reliant!

I want to request you all to ensure that the payment to the MSMEs is not delayed. You are well aware of the problems faced by the small industries on delay of payment.

The manufacturing sector of the country can get a boost from Central Public Sector Enterprises. You can play a major role in rejuvenating the sectors like rural housing, renewable energy, solar energy, textile, pharma, tourism etc.

I will also request you to hold the annual general body meeting at a new tourist destination, not the conventional ones like Agra. The people will get to know about the tourist spot and come to visit it. That tourist destination will develop in a natural course. Suppose there are 300 companies and each of the company holds 25 meetings in a year in 25 different tourist spots, then tell me whether the economy of that place will develop or not? Whether the infrastructure of that region will develop or not? You are usually holding the meetings in cities like Mumbai, Bengaluru, Chennai and staying in 5 star hotels. Can you hold the meetings in such new locations as well? Now you see, this is your routine but this will help in boosting the country's tourism sector. You don't have to do anything extra. This will happen only when your vision merges with the country's vision. Therefore, I would like to request you to take these small steps for nation building and the country's tourism sector would get a boost. This is the sector that has the capacity to provide highest employment out of the total capital invested. This soil has the ability to provide what the world is not able to provide. But we have never tried to reach up to our potential. How should we do that?


Our preparation for the future takes us to the fifth 'P' i.e. 'Prepare'. The Indian PSUs must prepare themselves keeping in line with technological innovations such as artificial intelligence Quantum computing, electric vehicles and robotics. It is estimated that by the year 2020, India's share in the Global Internet of Things market would be about 20%. It is a market of around 20 lakh crore rupees. It is also estimated that the share of Internet of Things in industrial manufacturing will be approximately 60%. Are the Indian PSUs framing the future strategy keeping this in mind? Are you analysing the data?


New technologies such as digitisation, analytics, e-mobility and block chain are going to help you in your efforts. These technologies can create new

opportunities for you in your business. You can also take advantage of the new innovations in financial market and the availability of a large capital pool for investment today.


When you move ahead in harmony with the needs and priorities of the country, better results are sure to follow. I am sure that the PSUs of our country have the full potential of becoming a New India change agent.

Today on this occasion, I wish to put forth 5 questions as 5 challenges before you. I am not going to say anything different from your presentation. I would like to present whatever you have said in my own way. I believe you will be able to do these things successfully. These 5 challenges will redefine your role in New India. I will not get into the details but will present a broad structure before you.

My first question: India will complete 75 years of independence in the year 2022. Will the Indian PSUs be able to increase their geo-strategic reach to the maximum by 2022? If yes then how? My second question: how will the PSUs help the country to reduce its import bill? You might be thinking that whose job is it? I want to give you one example. I went to the farm of a farmer in Haryana. This incident is 25-30 years old. His agricultural field was very small. He had requested me to visit him as he had done something new. He was 30-35 years old but was very enthusiastic. The five star hotels of Delhi used to import special vegetables like baby corns, small tomatoes etc. He decided to stop the imports and instead grow the same vegetables in a controlled environment for supplying them to the hotels. In just 3 years, he managed to stop the imports. If a son of a farmer is determined, he can do wonders. These self-reliant PSUs have played a major role in making the country self-reliant. Now, it's time to make your presence felt in the global economy. Although you have mentioned this in your presentation, I would still like to emphasize upon this. What alternative technology and equipment should we use so as to reduce the country's import bill? My third question: how should the Indian PSUs share the innovation and Research among themselves? Today we are working in isolation. As a result, the human resource is getting wasted. Someone has completed a work while the other is starting the same work from the scratch. If we work in coordination, you can imagine the leap in this area. Therefore, I am talking about integration.

My fourth question: can the CSR fund be utilised according to the dream of New India and to get rid of the problems that the country is facing? What should be its roadmap? How can we accomplish it collectively? You have mentioned about your experiments. You have made huge contributions in making toilets. And as a result we have seen such a drastic change in the country. Thus, it is necessary to focus on challenges one by one and find solutions for them.

Finally my fifth question: which development model will the Indian PSUs provide the nation by 2022? Will we keep on dragging the same old system or bring a new system in place?

I am putting forth these challenges in the form of questions because you have to take decisions, frame policies and strategies and also implement the same. When you discuss these questions in the board meetings keeping in mind the greater goal of nation building, new pathways will open up. You will get a new direction.


Your contribution is essential to increase India's Geo-strategic reach in the new world order. Today you have the opportunity as you meet people across the globe. Earlier such opportunities were few. We should not let go of this opportunity. You must be well aware of the fact that some countries have used their PSUs to increase their influence in other countries.

It's a fact that one-fourth of the 500 big companies of the world are PSUs of some or the other country. These companies are the medium of good amount of investment in their respective countries. Therefore, you must think on these lines to expand your base as much as possible. Today, government to government contact is increasing. Thus, you have a good opportunity to increase PSU to PSU contact.

Today the Indian PSUs are waving their flags from Brazil to Mozambique and from Russia to Australia. The need of the hour is that these PSUs should now frame a comprehensive strategy for overseas investment. You also have to keep in mind while framing the strategy that your return on investment should be as much as the geo-strategic reach. This government has signed a number of MoUs with the leading cities of other countries. Work is going on in developing several sister cities. Can our PSUs promote Make in India in a planned and a systematic manner together with the industrial bodies and Institutions of those cities?

Actually one state becomes the sister state of the other. Similarly, one city becomes the sister City of the other. However, the other units are left behind. Just signing one MoU is not enough. We have to maximise this. There may be 50-100 areas in which the cities can connect this way. Therefore, I appeal for new strategic views. There is a similar challenge of import bill in front of all of us. There are several products that are imported but these imports can be reduced. Government has reduced import bill in some sectors but there is a long way to go. In such a scenario, there is a good opportunity for you all in this area. This is not a big challenge. You just have to try and the transformation will be visible.

You can set a deadline for 2-3 years to reduce the import of any product by 10-15-20% whatever you may decide.

If we are price competitive and quality sensitive and focus on products that are imported but can be replaced by innovation, then there will be a significant reduction in the import bill.


I want to give you an example of the Defence sector. India has been one of the world's largest arms importer countries in the last 60-70 years. I do not want to get into previous policies. At that time no one could even think that Foreign Direct Investment will be opened up in the defence sector too by the government.

I believe that the PSUs of the defence sector should consider this as a good opportunity. The more our PSU emphasize on technology transfer and joint ventures, the more will the 'Make in India' get strengthened and the defence sector will become more self-reliant. Today India is building a fighter aircraft like Tejas and making world class submarines and warships. We are also technologically capable. In such a scenario, we have to keep an eye on the domestic market as well as the overseas markets.

Another important aspect is the integration of innovation with research. Our scientific Institutions like Council of Scientific and Industrial Research, Indian Council of Medical Research and Indian Council of Agricultural Research have the best R&D infrastructure. CPSEs also have modern research infrastructure in respective fields. You have also developed many techniques and innovative products. But it has also been observed that the innovation in the laboratory of different Agencies is limited to that. I believe it is the need of the hour to prepare an integrated infrastructure of innovation and research by 2022. When Information sharing between the CPSEs and the government departments will increase, the cost of research will also reduce and the system will be more efficient. This sharing can take place at different levels ranging from infrastructure to skill pooling, and the use of modern equipment and technologies.


In the last few years the public sector has done much better according to its balance sheet. Last year, the net profit of the CPSEs was more than Rs. 1, 25,000 crores. Two per cent of this amount i.e. around Rs. 2500 crore can be used as Corporate Social Responsibility.

We have to think about its apt use keeping in mind the country's priorities. You have shown on your presentation that in the year 2014-15, donations were made from the CSR fund for the construction of toilets in Schools. The results are in front of everyone. I suggest that a similar theme should be selected every year and a large part of the CSR should be put to a single task.

You must be aware of the 115 districts selected by NITI Aayog that have not been able to reach up to the levels of the other districts of the country. I have named those districts as aspirational districts. Can the development of these aspirational districts be the theme of this year?

Your organisation can also take up the task of skill development as a part of Corporate Social Responsibility. You can associate your organization with several universities, colleges and ITIs for a huge campaign on skill development.

Besides, the more you support the National Apprenticeship Programme, the more will the youth get benefitted out of it! I would like you to go and study the plans and schemes of government of India as soon as possible, form a team and take steps towards implementing them. The youth will come forward to learn with more passion upon receiving resources from your institutions. Moreover, they will also act as a talent pool for you.

Thus, you have to make more number of incubators and tinkering labs so that we can impart innovative ideas to the students at an early age. There is a need to tap the strength of the youth. Often, youngsters can provide an innovative solution which the present system is incapable of providing.


Your experienced and resource-rich institutions can also provide new models for development to the country. Your institutions can become the centres of energy in the remote areas for the entire region. If you all are determined, then the country can get hundreds of new model smart cities in 1-1.5 years.

Your institutions can prove to be a role model for several areas like paperless work-culture, cashless transactions, waste management etc. You have reach and resources. With R&D you can show good results. This will be a great service to the society and the country.

I insist you all to focus on maximum efficiency, corporate governance and proper use of resources. No person or institution or a country can prosper without having faith in their resources and strength. There is no shortage of resources in India or lack of strength. We have the will-power and the trust in ourselves.

In the last 4 years, you would not have for once heard a negative tone from the government - such as complaining about difficulties or problems. I believe we can take our country to new heights. This is the promise of this government. There is no shortage of resources in our country. Come, let us move ahead together.

I believe that this initiative which you have taken will continue this way. The ideas that have emerged and are emerging out of this discussion will not only be implemented but also be monitored.

I believe that the combination of energy and experience, enterprise and enthusiasm will yield unprecedented results. To me PSU stands for: Pragati, Seva and Urja (Progress, Service and energy). And ‘S’ i.e. Service is at the centre!

Carrying forward the dream of New India along with a new energy and feeling of service will definitely lead the country to the path of Progress. This is my belief.

I hope your policies regarding the country's future become successful and your participation in the accomplishment of the resolution for new India is the maximum. Before ending my speech I want to request you all. Can I meet all the leaders after hundred days? I would be grateful if you can educate me regarding the framework that will be set for accomplishing the things discussed today. Even I want to learn a lot from you. If I am able to spend more time with you and learn from you, I can bring those changes in the government. So, I would like you all to frame a roadmap of the things discussed today and the responsibilities allotted and meet me after 100 days. It's not that everything is hunky dory, the future is bright or the people are enthusiastic or the results are bound to be achieved. But we have to move in that direction even if it means moving 100 steps. We can set deadlines, the team and the resources for achieving the smaller goals. You belong to the corporate world. You need not be told all these things. You must have studied management after paying hefty fees. I don't want to get into the details of what they have learnt and implemented. However, I hope you all will think over today's discussion. I hope you will take advantage of these things. Now I want the proper roadmap with measurable targets. They should not be superficial. You will see the transformation soon. Best wishes to you all. Thanks a lot!

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Social Media Corner 13th June 2021
June 13, 2021

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