Delay In Appointing Directors Stalls Psu Autonomy

The proposed autonomy to selected public sector units (PSUs) has been delayed by the governments inability to appoint non-executive directors to the revamped boards of these units.

The industry ministry, while clearing the package for financial autonomy for PSUs, had granted autonomy subject to the revamp of boards.

So far, the government has announced the appointment of non-executive directors only to the boards of Bhel. This leaves 10 other navratna and 97 mini ratna PSUs in the cold.

The new and compressed compendium of PSU guidelines recommended by an expert committee headed by N Vittal, chairman, PSEB, has also not been accepted by the government. As a result even limited managerial autonomy envisaged by this exercise remains a distant dream. This was revealed by Udesh Kohli, chairman, SCOPE, at an informal interaction with the members of the Forum of Financial Writers here yesterday.

The SCOPE chairman who is also chairman Power Finance Corporation (PFC) sought a level playing field for PSUs.

He pointed out that delays were inbuilt into the clearance procedures for PSUs for raising funds, tendering a contract and appointments.

At presently, PSU were not only under parliamentary control which meant that commercial decisions taken by a PSU were subject to CBI and CVC investigations. Additionally, the PSUs were also subject to the writ jurisdiction of courts which meant that any tender floated by a PSU could be challenged in court and a stay obtained. All these added to delays which hampered the efficiency of PSU managements, Kohli said.

At present, the department of public enterprises seeks to control almost every aspect of management in PSUs through detailed guidelines and so far 892 such notifications have been received, he said.

The committee headed by Vittal had gone into the aspect of managerial autonomy and had recommended the withdrawal of nearly 760 guidelines issued by the industry ministry.

These guidelines covered every aspect of PSU functioning and left PSU managements with no freedom to function freely in the new environment, Kohli said.

The lack of managerial autonomy had instilled fear among PSU managers because the distinction between malafide and bonafide decisions were not clear, Kohli said.

For the efficient functioning of PSU managements, steps would have to be taken to assuage this fear, he said.

The government has failed to appoint non-executive directors to the revamped boards of 10 navaratna and 97 miniratna PSUs .