Scope Moots Fund For Psu Development
The Standing Conference of Public Enterprises (SCOPE) has proposed the creation of an independent public sector development fund for the revitalisation of loss making and sick public sector units. SCOPE has also suggested that a separate body be instituted for regulating the proposed fund.
Uddesh Kohli, chairman of SCOPE, said, "Even if it is not feasible to institute a separate body, the Disinvestment Commission could perform the function of a regulatory agency for the fund." Kohli, accompanied by members of the advisory body of SCOPE, was in Calcutta to discuss common issues with the top brass of public sector units (PSU) based in the eastern region.
The proposed fund would be fed by the budgetary support extended to sick PSUs and part of the funds which would be released by disinvestment. "Ideally we would prefer the entire proceeds of disinvestment to flow into this fund. However, what is proposed is that any support money given to ailing PSUs should be routed through this fund," said Kohli.
The eastern region would be the biggest beneficiary of the public sector development fund since out of the 100 sick PSUs in the country, more than half are based in this region, he said. In fact, Kohli added, the proposal for a fund of this nature has already found expression in the recent union budget where the finance minister mentioned the creation of a restructuring fund for PSUs. There is also a strong need for making PSUs board managed and remove interference by government officials and parliament. "PSUs must be allowed to function like proper commercial organisations instead of a government department," said Kohli. Government agencies have no role to play in the affairs of public enterprises and in place of the present memoranda of understanding system, there should be a strategy agreement to cover aspects like profitability, he said
The other issue of concern to SCOPE is contract labour which it is actively pursuing with the government. Citing the case of the Supreme Court judgement on Air India, M A Hakeem, secretary general of SCOPE, said, "It is very crucial to the future well-being of PSUs that the . It will be wrong to totally abolish the contract labour system in the interest of greater cost-competitiveness. The earlier idea of doing everything in-house has become irrelevant now. Farming out jobs can cut costs."
A crucial point of discussion is that the pay scales of executives in PSUs should be brought at par with those of their private sector contemporaries in order to retain valuable talent. Revised payscales are expected to come into effect shortly. On the issue of disinvestment in PSU's, Kohli said, "From the SCOPE side, we have never been opposed to private ownership of PSUs. We would be open to private ownership even upto 70 per cent and if possible 100 per cent. However, this must be done quickly, even if it is done in stages."
SCOPE has in fact suggested that leaving aside strategically important companies, government holding in all other PSUs should be below 50 per cent. He also pointed out that while the previous government had granted a series of incentives like navaratna packages and miniratna packages, the much needed intensive integration on issues with the present government is yet to take place.