Since a major part of the industrial activities was reserved for the public sector during the first four decades after Independence, employment in sectors such as oil, power, coal, heavy engineering and telecommunication - often touted as the biggest job creators - became the most sought-after career option for bright graduates from premier engineering and management. Of course, the IT and BPO sectors have absorbed a respectable proportion of the incremental labour flow later, but barring these sectors, no other private sector has contributed significantly to job creation.
What also continued to draw employees to PSU jobs was job assurance. Employees of state firms were proud of their job. Above all, the additional perks such as general allowance, soft loans, post-retirement benefits like free medical benefits and handsome pensions were enough to keep employees glued to their jobs. The much-coveted ‘government jobs’, however, seems to have lost all its glory since its heyday in early 2000 with employees not even getting their basic salaries on time now, forget allowances.
“We’re getting a lot more calls from a particular category of job seekers - senior officials at public sector companies. Many of them are bright and committed, but disappointed with their current jobs in state-run firms,” said a Delhi-based consultant at an executive placement agency. After years of being in a job that offered security and stability, many of them now feel stressed out and demotivated. Added to that is the pressure to recover the basic monthly salary, he added.
The immediate trigger for them to look out for jobs, though, is that the once-cash rich PSUs are now making losses, which has also been one of the primary factors for non-payment of salaries. There is no cash to dip into. And some loss-makers like Hindustan Aeronautics Limited (HAL), Bharat Sanchar Nigam Limited (BSNL) and Air India, for whom this should be a last resort, are also dipping into their cash reserves to pay salaries to their staff.
Take the case of BSNL. “The gap between monthly revenues and bare expenses to continue operations as a going concern has reached a level where continuing with BSNL operations would be nearly impossible without immediate infusion of adequate equity,” Puran Chandra, senior general manager at BSNL’s corporate budget and banking division, stated in a letter to the joint secretary in the telecom ministry.
The public sector company has nearly Rs 12,500 crore as outstanding liabilities leaving the ailing firm in a fix. With no funds, BSNL may fail to pay June salary to its 1.76 lakh employees. BSNL joins a string of state-owned companies to struggle with funds. In an irony of sorts, HAL, which is touted as the largest defence PSU in terms of production value, was forced to borrow money to pay January salaries to its employees. The firm had borrowed Rs1,000 crore as an overdraft.
Similarly, senior officials of Air India have also admitted that the airline doesn’t have enough funds and may default on payments at any moment. The airline currently has Rs 2,500 crore left and their monthly salary outlay in itself is nearly Rs 300 crore.
While talks of a revival package are doing the rounds, employees of each of these firms await answers to what the government would do to help the PSU function on a day-to-day basis and whether the government intervention will now resuscitate the companies. “Some of the PSUs, in fact, which are struggling to retain existing talents, have created a disincentive for good talent to join and aspire to grow in their organisation,” rued an employee of a steel PSU, adding that government jobs, irrespective of sector, was no longer a staid and steady job.
He recalled that in earlier days people seeking a stable profession elected to join the public sector which did not have the trials, rivalry and uncertainties that came with a private sector.
It may also be recalled how mounting pension liabilities drove General Motors (GM) to the verge of bankruptcy in 2008. That was until the US government bailed it out. In 2008 itself, the pension liabilities exceeded GM’s revenues. At the beginning of 2014, that obligation stood at USD 105 billion, an amount that can potentially buy it Ford Motors, Tesla Motors and Fiat Chrysler. Such is the case of Indian Railways to boot.
In fact, since the financial year 2009, the Railways has been appropriating a much larger sum to the Pension fund than its operating profits. The pension scheme, which was the main draw for government jobs, has, in turn, become a cause of serious concern for a majority of the 2.15 crore government employees in the country. All said it remains to be seen if the government at the Centre could bring back the lost status of government job holders.