Belying Hopes

Public sector units (PSUs) account for 12.5 per cent market capitalisation of BT 500 universe and a significant chunk of the economy. When the economy was struggling to cope with Covid-19 and the resultant lockdown, many had expected that the government would unleash their full potential to support the economy. The idea was to push capex through large PSUs and lending through large public sector banks (PSBs). But that doesn’t seem to have been the story.

As per the Reserve Bank of India (RBI) data, gross bank credit fell 1 per cent between March 27 and September 25. Investments in new and completed projects during first six months of FY21 fell 37 per cent from ₹8 lakh crore to ₹5 lakh crore, says CMIE. According to National Statistical Office, gross capital formation was down almost