What I am struggling to understand is, even if a PSU is operating in a competitive environment, why does an arm of the Govt. have to engage in entreprenuerial activity at all? Unless there is a public good involved, and one that will not be satisfied (or improperly so) by the private sector, it is a waste of Govt. time and effort setting up a PSU, monitoring it and accounting for it, etc. Even a PSU that is corporatised and given relative freedom, to my mind, is a diversion from the real task of constructing public policy, regulating economic activity and providing essential public goods like primary education. If the Govt. wastes time discussing the performance of ONGC, it has that much less time to debate ciritical issues such as the policies that govern exchange between the different sectors of the economy, our competitiveness as a nation, or general welfare, etc. Which means safe drinking water and sanitation, law and order, etc. are wrongly appropriated by private enterprise. I live in a gated community where we have a modicum of security through private guards; we process our groundwater through RO plants, etc. My point of this is that if the Govt. were to focus on these needs, we would not be driven to doing these. Think, any of these carried to an extreme, and you can have private militia, exploitation of natural resources, and other ill-effects. Hence my argument against PSUs is not due to any natural aversion, but merely on the principle that economic activity is a task that the Govt. or public sector is ill-equipped for.

Makes sense?

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