The industry minister has taken the cue from the finance minister in pushing for financial and organisational autonomy of public sector undertakings. P Chidambaram had favoured nine select PSUs (navratnas) with autonomy to invest, diversify and go in for joint ventures. Murasoli Maran has identified 97 others. The choice has been dictated by the ability of the concerned PSUs to take the initiative. Their capability has been assessed on the basis of their profit record. This should accelerate investment by the more dynamic PSUs. The important point is not that freedom to invest without the prior approval of the government has been confined to an absolute amount; but rather that within the permissible limit, PSU boards can go ahead without seeking bureaucratic or ministerial approval. Navratnas and mini-ratnas are now being distanced from governmental pressure. This is an advance.

The point may be made that PSUs are not being made autonomous enough. The government will continue to "advise" them from time to time. It thus retains veto power. But without this, the top brass of the PSUs could become warlords! In the private sector, even a Kerkar had to yield to the Tatas. The controlling interest is the controlling interest whether in the private or the public sector. Managements have to lump it. PSUs will have to keep on the right side of the government. This does not necessarily mean they will be mere puppets. By making sensible proposals, PSU boards will have the power of ideas on their side.

The trouble is that corrupt politicians and bureaucrats are meddlesome. This is a political problem which is hardly amenable to a non-political solution. A number of PSUs are topless because the powers that be do not accept the personnel chosen by the autonomous selection board. The government can thus make PSU managements grovel, but not if they do not curry favour. Will PSU managements please introspect? It is also time to consider whether the government should as a matter of policy disinvest 74 per cent of its equity holdings in PSUs and ensure that at least a half of the privately owned shares are held by dispersed shareholders owning less than 200 shares each. The working of PSUs will then acquire transparency. Accountability to the ordinary shareholding public will be the best brake on wayward management and government.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.