Privatization of Public Sector Enterprises (PSE) is essential for making them efficient and profitable because privatization reduces economic inefficiencies and fosters competition.

Public sector enterprises drain away a significant chunk of government resources each year and their annual operational losses amount to about 2 percent of the GDP, there was need for good follow up on privatization of these enterprises which have put heavy burden on economy, Mahfooz Elahi, President Islamabad Chamber of Commerce & Industry (ICCI) has made these remarks, addressing the business community at ICCI.

He said that Finance Minister has made commitment in the budget speech for restructuring the major PSE which was appreciable. He said that restructuring the PSE was necessary to reduce the burden on the budget and improve public service delivery.

ICCI President was reacting to the reports and said that these PSE eat away over Rs.500 billion of public money every year which could be used for welfare programs.

Mahfooz Elahi was of the view that major public sector enterprises have been facing severe financial crisis and for running these enterprises. High fiscal deficit and rapid increase in domestic and foreign debt that have doubled in the last three years, demand strict fiscal measures by the government, he emphasized.

He said that policy makers should think out of the box to resolve the issues pertaining to public sector organizations as privatization was the best policy prescription to inject efficiency and profitability in the PSE.

ICCI President said that the privatization of the loss- incurring PSEs was not an easy process, it would be more prudent that other policy alternatives should be explore while formulating a strategy for the restructuring of the PSEs.

He further said that good corporate governess and effective monitoring system have to be practiced for smooth running of Public Sector Enterprises.