Most of the government companies have contributed in building this country. If the economy was not open or there was not competition there is no fault of management of these companies and enterprenuership skill of theri management should not be played down just because of the fact that they work in governrment compnaies. LIC and SBI are competing with the private sector players despite the fact that the playing field is not even. These companies still carry so much baggage of social service and foot the bill unlike their counterparts in private sector, who just care about their profits and growth and avoild the rural and poor mass.
Re: Tax
by sanjay khetan on Sep 19, 2008 06:01 PM Permalink
blah blah blah. Even Govt. in interested in Money and hence the high rates of taxes. Pleasse also note that there is a high degree of corruption in govt. companies unlike private sector and hence the Govt. companies make less profit.
Employees get paid more even if they dont deserve it
It is change of money from one pocket to the other !!
by SK2007 on Jul 05, 2008 07:06 PM Permalink | Hide replies
Govt companies just need not bother to pay taxes coz they want to show performance, whether loose or gain just show profit so that the top management get their benefits. In cases whenever they fail and run under loss, they can always bank on the govt funds to support. In case of private companies, it is not possible because they need to look into their future reserves. Just imagine a case where pvt companies pay heavy taxes earlier years and then thye start loosing. Money paid to govt is gone and the same govt will not come to their rescue whever they loose. Moreover there will not be any appreciation for tax payers whatever they pay. After paying taxes in every step of their activity in differene forms, excise, sales tax, esi, pf, etc etc, the companies are paying income tax too. This no body understands. The so called critics, particularly salarid class always pointing finbgers at the business class.What they should understand is that the private entrepreneurs need to create security for the future and just can't share every rupee earned wth the govt. In case of loss, they are the most hit. Though salaried class has limited resources, (except govt servants), their life is secured.
Does it pay any tax at all or is it fully subsidised like land and other amenities? Wonder what would happen to IT/BPO if they were made to compete on a even footing with other industries!
Out of the 10 8 are government companies.The people who these companies does not get anything by saving income tax. It clearly shows that many private sector companies are avoiding payment of tax. They see some loopholes in the law and reduce their tax liability. This is apart from false adjustment in the accounts.Government company directors do not bother about these and pay the tax
The reason govt companies make profit is that they have huge monopolies and the government foots the bill for the subsidies in oil, but it does not do it for private oil companies.
Companies like LIC have been allowed to create a monopolistic market for decades, in which they spread their tentacles far and wide. that is why they are turning in profits. all private players were debarred earlier, thus killing competition. the result is that in spite of losuy services, these companies rake in profits.
markets in india are totally third rate, there is no compateition or quality of service worth the name.
many other PSUs have been kept alive on public money to save jobs. SAIL was kept alive due to populist reasons when it was turning losses for decades. no private company would be afforded such facility.
I would appreciate a gov company which can run along with private players in free competition, which incuded some high technology rather than these low tech commodities, and then rake profits. but there are none. look at indian airlines, sindri fertilizers and many others which are long dead.
