Public sector companies are inefficient, says Maruti Chairman

Maruti Suzuki India chairman R C Bhargava said that the government should not be running businesses as public sector companies are inefficient and need support all the time to grow and need funds from the government for capital investments.

Giving the example of Maruti before privatisation, he said that a public sector firm is handicapped by the entire environment, such as the limitation of being an instrument of state under the Constitution, as a result of which all the fundamental rights in the Constitution were enforceable against the company.

He further said, “The fact of the matter is that companies run by the government are not efficient. They don't have productivity. They don't generate profit. They don't generate resources. They don't grow. They need government support all the time to grow. There are not many public sector companies which have grown from internal resources. For most capital investments they need to get funds from the government. You can't have industrial growth from taxation, period!”

Bhargava said, “The country is going to lose because you’re taking away money from the taxpayers to support this inefficient working. There were so many, what I would say, non-value adding activities which one had to do, which interfered and added costs for what we're doing and prevented us going forward.”