AT A time when the entire nation is being gripped with the election fever to elect a new government at Centre, bosses of top public sector undertakings have aired their strong opposition to government's control in the affairs of the public sector companies. The state-owned PSUs that have for long been at the receiving end, decided to bare it all at the CII annual meeting 2014, expressing strong reservation...about the nature of government ownership, management control by parent ministries and lack of autonomy in appointment of boards and CEOs. This was stated in a CII press release.
In a bid to decontrol from themselves from the intervention of the government, leading PSU heads are proposing the idea for “a holding company for the Maharatna and Navratna PSUs with representation from the government on its board”.
PSU heads feel this is the only way to free the cash-rich PSUs from government supervision.
The idea assumes significance in the wake of government seeking higher dividends from the cash-rich PSUs to attain the target of disinvestment. Whenever the government falls short of cash for some project, the cash-rich PSUs turn out to be milking cow for the government.
Addressing a Confederation of Indian Industries (CII) meet in New Delhi on March 27, CS Verma, CMD, SAIL said: “We are floating the idea of a holding company for the Maharatna and Navratna PSUs with representation from the government on its board. Then companies can be free from government supervision.”
Arup Roy Chowdhury, CMD of another Maharatna PSU echoes similar view. “Governance of multiple agency in PSEs need to be done away with enhanced CPSE autonomy and performance,” Chowdhury said.
The PSU bosses have stated it clearly that it was rather difficult it is to operate a government-owned company if more freedom is not granted to their affairs.
Top honchos of leading PSUs have said that at a time when they are to compete with global and private entities, government control makes things difficult for them to perform in a globalised scenario.
They say government owners at every level from investment decisions to appointment of directors on the board stymies the task of performance for these PSUs.
“The problem is not about who is the owner but whether the owner is willing to take the responsibility,” said Roy Chowdhury of NTPC.
To top it all, these CEOs are subjected to questioning and interrogation from public vigilance and audit authorizes such as the Central Vigilance Commission for every small decision. “Do you know we have to be cleared by IB, CVC, CBI and a multiple other agencies before we assume office and have to be answerable at every stage,” Roy Chowdhury said.
Expressing a strong objection on the appointment of boards and the need to separate ownership and management, Verma of SAIL asked, “What is the role of various ministries in sectors which have been deregulated? “He cited the example of how there was a move by the government to allow independent directors of a company to take a view on the functioning of the CEO or functional directors. “This was a clear attempt to divide the board among independent directors and government directors,” he said.
PSUs are operated as extended arms of government and there was a need to define this ownership, they maintained.
While speaking in favour of a holding company concept to represent government ownership, MTNL chairman AK Garg said that caution should be taken that this holding company is not a duplicate of the current structure adding yet another agency.
While many of them agreed that there was a need to have public sector companies, the government perhaps needed to re-evaluate their roles and their forms.
S Narsing Rao, chairman of Coal India in his speech said that caution should be taken that natural resources should be exploited for the larger good and welfare of the people and not left in some hands until there was a transparent mechanism in place.
Earlier, setting the tone for the discussion, Planning Commission Member Arun Maira said that while there is a need for the government to own some companies in the public space and deliver some crucial services like water or health, there is an urgent need to see that PSEs are run effectively and are able to deliver goals.
Overall, the message across the board from the PSUs was loud and clear to the next government that is taking charge in a couple of months. More government control of PSUs is doing no good to them.