NEW DELHI, January 22: In what will be the next big step in public sector reforms, efforts are being made to rope in public sector units (PSUs) run by state governments. The Standing Conference of Public Enterprises (SCOPE) is extending its membership to state PSUs and is drawing up a plan to usher in reforms for these units.An autonomous body which represents central PSUs, SCOPE plans to hold a series of meetings in cities like Hyderabad, Bangalore and Mumbai to make the concept of reforms more acceptable to state governments. While there are only 245 central PSUs, the number of PSUs in states are 962. While a couple of state like Gujarat have made concerted efforts to improve their performance, the PSUs in most states are still a big drain on the resources.
While there is no comprehensive information available on all state PSUs, the Reserve Bank of India has data on eight states. These figures show that the losses on account of PSUs in these states were about Rs 900 crore in 1994-95. (The eight states
are Tamil Nadu, Kerala, Karnataka, West Bengal, Madhya Pradesh, Rajasthan, Assam and Haryana.) Experts feel that the current loss figures for all the states would be two or three times higher.
Says M.A. Hakeem, secretary general of SCOPE, ``We hope to bring in some kind of uniformity in the reforms of state PSUs. For this we have identified some issues which the governments would need to address so that the performance of PSUs improves.''
Firstly the state government should review its portfolio and pull out of the PSUs which are not relevant and useful. A divestment or outright sale should be planned for these. And the companies which the government wants to retain, it need not own 100 per cent equity in them.
The Government should stop the practice of appointing politicians and bureaucrats as heads of PSUs. Professionals should be appointed through a transparent selection procedure. The professionals should be on contract and should be sacked if they do not deliver the results.
The government should
evolve a set of guidelines for itself which would be binding on politicians, bureaucrats and top executives of the PSU. These guidelines can be in two parts. One to govern the interface between the Government and the enterprise and the second for the board of the PSU to guide in its work.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
