Liberalisation has exposed them to global competition. That fact as well as recognition of the need to raise the efficiency of the vast public capital invested in the navratnas over the decades has induced new thinking. Financial and operational autonomy is essential to improve performance. But it would be well to see just how many of the apron strings are being cut before rushing to the conclusion that nine global giants have been launched. What SAIL, ONGC, IPCL, HPCL, IOC, BPCL, BHEL, VSNL and NTPC are being given does not amount to full financial and operational autonomy.

This is very clear firstly from the omission in Maran's statement of any mention of dismantling the administered prices regime. As long as politicians and civil servants are involved in this vital area of commercial decision-making, operational autonomy will remain partial and fitful.

Second, labour polices remain untouched which means little can be done about the excess fat all the corporations have accumulated. PSU managements will be free to institute their own systems of rewards and incentives to get the best out of their workforce.

But, as of now, unlike competitors abroad, they cannot do much by way of pruning heavy wage bills. They will also continue to be answerable to Parliament through scrutiny by Parliamentary committees and the Comptroller and Auditor General. This is as it should be since the PSUs are public bodies handling public assets. But without streamlining procedures and a better understanding among politicians of business practices and objectives, public sector managers are bound to be left in an ambiguous position.

Maran does seem to have attended to matters at board level, proposing the infusion of independent, professional directors and a high-powered search committee to appoint them. On the financial and investment front there is new freedom with regard to raising resources, incurring capital expenditure and setting up joint ventures at home or abroad. The proposed ceilings on equity investment in new projects are indicative figures in that anything above them will need ministerial sanction. Public sector managers will welcome the changes in the hope that having tested the waters, the government will be emboldened to free other areas of decision-making in these and other PSUs. But what is available just now does not amount to a comprehensive policy on PSU autonomy, much less a vision for globalisation.

The fact that the Industry Minister has gone ahead, nevertheless, and announced his proposals suggests an attempt to win over critics of PSU disinvestment in the United Front and the trade unions. The point being made is the one in the Common Minimum Programme, that PSU reform means strengthening the viable, profit-makers as well as privatisation. It is well worth making but sooner, rather than later, more red tape will have to be cut.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.