The public sector has been playing a vital role in the economic development of the Indian nation. As a matter of fact, the public sector has come to occupy such an important place in the economy and on its effective performance depends largely the accomplishment of the country's economic and social goals.
Public sector has successfully created millions of jobs to tackle the unemployment problem in the country. Public sector accounts for about two-thirds of the total employment in the organised industrial sector in India. By taking over many sick units, the public sector has protected the employment of millions. Public sector has also contributed a lot towards the improvement of working and living conditions of workers by serving as a model employer.
Ironically, the public sector of Jammu & Kashmir presents a bleak outlook.
Financial mismanagement, ill planning, non-implementation of projects, lack of vision, faulty recruitment policy and other deficiencies have become symbols of our ill managed public sector. Even the all important public health and education sector present a bleak outlook in our part of the world. The declining health of the public sector according to sane voices is a matter of grave concern and calls for remedial measures. The inefficiency according to many voices is eating the vitals of our public sector.
All this has resulted into a loss of Rs 158.86 crore to 14 Public Sector Undertakings (PSUs) in Jammu and Kashmir during the financial year of 2009-10. Further, the controllable losses, which could have been avoided with better management and professionalism, swelled from Rs 4.29 crore to Rs 45.38 crore during the last three years since 2007.  According to the recent report of Comptroller and Auditor General (CAG) of India, Jammu and Kashmir State Road Transport Corporation incurred a loss of Rs 54.67 crore during the financial year 2009-10 while losses of J&K State Power Development Corporation and J&K Industries Limited during this period were Rs 39.05 crore and Rs 36.23 crore, respectively.
It is worth pointing that as on March 31, 2010, there were 23 PSUs, which include 20 government companies (17 working, three non-working) and three statutory corporations.  Even as overall performance of the working PSUs improved gradually after 2004-05, but astonishingly enough only four out of the 20 earned profit while 14 continued to incur loss because of poor management. It is further learnt that  One working PSU, J&K Cable Car Corporation Limited did not prepare the Profit and Loss Account while J&K State Forest Corporation has never submitted its accounts since its audit was entrusted to CAG in 1996-97.
Out of the total profit of Rs 514.89 crore by four PSUs, the major contributor was the Jammu and Kashmir Bank Limited. It earned Rs 512.38 crores while J&K Cement Limited registered Rs 1.53 crore profits during 2009-10.
In order to encourage the development of small scale and medium-sized industries in the country, the Government of India has launched a national programme. Public sector has contributed to this programme by fostering the growth of ancillary industries and satellite planets. Such plants have been established around the major public sector undertakings. The need of having such industries and plants is direly felt in the state so as to tackle the grave problem of un-employment in the state. But what we have seen in the state of J&K is utter inefficiency while managing the public sector units.

According to the CAG report, the losses of PSUs are mainly ascribed to deficiencies in financial management, planning, implementation of projects, running their operations and monitoring.The CAG report clearly indicates lack of professionalism in our Public Sector Units. A review of the latest audit reports of the CAGs also says the State PSUs incurred losses to the tune of Rs 45.38 crore which were controllable with better management. As per CAG’s audit report for the year 2007-08, the controllable losses were Rs 4.29 crore, which swelled to Rs 14.04 crores in 2008-09 and Rs 27.05 crores in 2009-10. Thus a total loss of Rs 45.38 crore, which could have been avoided with enhanced management and professionalism, were incurred by the working PSUs in three years, says the CAG report adding that the real controllable losses would be much more.
The lethargic attitude of the government towards the losses being incurred by these PSUs can be gauged from the fact that the three non-working PSUs, which are under the process of liquidation for the more than seven years, were not closed down till March 31, 2010. These companies include Himaliyan Wool Combers Limited, J&K State Handloom Handicrafts Raw Material Supplies Organisation Limited and Tawi Scooters Limited.
It is shameful to note that the PSUs of the Jammu & Kashmir State have properties worth billions of rupees at prime locations but still they are penniless and are not able to tap their resources in right direction. These PSUs have also failed to provide any answers to our burning unemployment problem.
One of the leading Corporations - the State Road Transport Corporation (SRTC) had suffered a loss of Rs 389.21 crore till March 31, 2009. Just a few times back, the Corporation was in very pitiable state of financial health, and it could neither augment its fleet nor purchase new vehicles. Pertinent to mention that the Corporation has lost substantial market share in the past few decades, primarily due to government apathy. Its market share in terms of plying its vehicles on roads has come down from 27.5 percent in the late 1980’s to about 1.5 percent currently.
Kumail Ahmad, a student said, “The public sector in our state is marred by widespread inefficiency and continues to incur losses. Majority of our Psus are running in losses on account of poor management. On the other hand in recent years, the public sector of other states has made increasing contributions to the public sector in the form of dividend, corporate taxes, excise and customs duty, etc. The total contribution from the public enterprises to the exchequer has been quiet impressive in other states.  Public sector has contributed a great deal in improving the balance of payments position of the county. The public enterprises have saved valuable foreign exchange trough import substitution. The authorities in our state need to wake up and refurbish the public sector of the state so as to improve economy of our state.”
In our part of the world, even the al important public health care and public education system is virtually in shambles. The Public Health Sector of the Jammu & Kashmir State, especially that of the Kashmir Valley is in shambles. Most of the government owned hospitals are failing to meet the needs of patients and rural health care is especially in dire straits. The abject scenario pertaining to public health sector calls for the implementation of drastic measures.
The poor performance of government schools despite being staffed with sufficient manpower and quality aptly describes the status of our Education System. Just as the seven deadly sins correspond to weaknesses in human nature, the sins of public education are inherent in the nature of the existing system -- that it is controlled, operated and funded by government.
Gulzar Bashir,a commoner said, “Leave aside public sector units of the state, the two main public sector areas i.e education and health sector in our part of the world are in utter disarray and demand urgent attention from authorities.”
The grave realities call upon the government to fix the rot in our public sector so as to refurbish the public sector in our part of the world towards an era of betterment wherein it can lead the economic prosperity of Jammu& Kashmir State and especially provide a suitable answer to the burning unemployment problem in the state.

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