Guestcolumn By V. Suresh

In addition to productive assets for their manufacturing/service operations, PSUs were obliged to create huge non-productive assets by way of townships, schools, hospitals, etc. These have created islands of prosperity, without commensurate multiplier benefits of downstream job creation through abundantly available, low cost, quality ;materials and services to the large, medium, small, tiny and rural private sectors. Eventhe productive assets, in the battery area of plants, have been under-utilised, due to poor housekeeping, cleaning, lubrication, upkeep, maintenance, replacement, renewal and modernization.

The PSUs need to run as business enterprises. This would be absolutely essential in view of the increasing entry of the private sector/global consortiums in areas hither to considered as the domain of public sector in India and the emerging competitive environment from the private sector. The SCOPE in its special report on Corporate Governance and PSUs indicates that the issue before the PSUs is squarely in the realm of empowered internal governance, dismantling the multiple accountabilities and restructuring the control mechanisms in line with best practices, so as to ensure sustainable and long-term value creation for the stake holders. The PSUs are under a transitional situation and to make them adopt to the emerging situation, it would be necessary to free those from excessive government controls and increasinglyenable them to govern themselves effectively.

In the emerging context of international competition and self reliability of the public sector, there is need to reset the objectives of the public sector. In fact, the white paper assured by the government in 1987 is yet to be firmed up. The Public sector today, requires a customer orientation.

Except a few, most of these today are inward looking trying to satisfy the immediate administration which it reports. The PSUs are needed to function with relative autonomy with a vision of future, with only marginal guidance/conditioning by the government.

There have been honorable exceptions of improvements in all the three above aspects-resource productivity, opportunity exploitation, and profitability. Even in such cases, the PSU managers, workers, union leaders and friendly observers are worries about how sustainable is the improvement. There have been cases where political and administrative meddling, lack of continuity in policies arid key appointments havenullified and reversed the progress.

In spite of this dismal economic performance as a whole, the public sector has contributed significantly to its social obligations of employment generation, equal opportunity, geographic distribution of resources, planned development etc. In the era of post-liberalisation, this will continue to be the sole rationale for existence of public sectors in India. An ideal public sector in my opinion should be the one having a social orientation in its operations and having wider reach both spatially throughout the country and across various cross sections of the society.

The author is the CMD of HUDCO and the views are personal.