Springer Public Sector Enterprises in India: The Impact of Disinvestment and Self Obligation on Financial Performance

Based on a data set covering the last two decades of India's development, this study analyzes the financial performance of public sector enterprises, assessing their success in adapting to a liberalized business environment of disinvestment and subsidy cuts. From the Back Cover The book examines the various aspects of non-financial central public sector enterprises (PSEs) in India, for a period from 1986-87 to 2010-11. The analysis is based on all the key financial ratios; namely, profitability, efficiency, liquidity, leverage and productivity. Liberalization and globalization have caused competition in India and have lowered the profit margins. At the same time, Indian government has reduced subsidies and budgetary support for PSEs to curtail their own fiscal deficit. Strategic and economic reforms were also introduced in PSEs to make their operations commercially profitable so that they are not dependent on the government to meet their financial requirements on the one hand, and have their own earnings to finance their expansion/modernization requirements as well as their social obligations, on the other. To what extent, the PSEs have succeeded in this objective constitutes one major aspect of the present research work. The other equally important aspect examined is financial performance of the PSEs which have opted for disinvestment and have signed memorandum of understanding (MoU)/ self obligations. The Indian Government has desired the central PSEs to be profitable in their operations in post-liberation era of 1990s. For this purpose, two major instruments, namely, disinvestment and MoUs, were introduced. This book examines, in detail, financial performance of PSEs which had opted for disinvestment and have signed MoU. Based on analysis/ findings and literature on the subject, the book contains some concrete suggestions that would prove extremely helpful to Indian Government to further improve their financial performance. About the Author P. K. Jain is Professor of Finance at the Department of Management Studies, Indian Institute of Technology Delhi, New Delhi. He is also the Modi Foundation Chair Professor. He has earlier been the Dalmia Chair Professor and coordinator of Dalmia Research Programme on Management in Asia. He has been teaching topics related to management accounting, financial management, financial accounting, cost analysis and cost control, for more than 40 years. He was a visiting faculty at the Foundation for Technical Institute, Basrah and University of Basrah, Iraq, and also at the University of Paris I, France, and School of Management, Asian Institute of Technology, Bangkok, Thailand. He was conferred the title of Honorary Visiting Professor by the Faculty of Economics, Ljubljana, Slovenia, where he has been serving as a visiting faculty for the last 11 year. He has authored/co-authored many research books and has published numerous research papers in journals of national and international repute. He has organized several Management Development Programme (MDPs)/Continuing Education Programmes (CEPs) both for the public and private sector executives in the areas of finance. His contributions in the field of finance have been recognized at national and international levels and several awards and recognition have been conferred on him. Seema Gupta is Assistant Professor of Finance at Guru Nanak Institute of Management & Information Technology, Delhi. She has obtained a Ph.D in finance from Indian Institute of Technology Delhi. She has an MBA (Finance), Master of Computer Science and M.A (Economics). She has more than a decade of teaching experience and 3 years of industrial experience. She teaches financial and management accounting, cost accountancy and financial management. Her research papers have been published in the journals of national and international repute: Journal of Advances in Management Research (U.K), Journal of Applied Finance and Banki