The Report on Empowerment of Central Public Sector Enterprises, prepared by a group of experts headed by Arjun Sengupta, has recommended greater autonomy for Public Sector Unions. The group, appointed by the government, wants central PSUs to have independent boards. The most important reform suggested by the committee is that ministries should not interfere with the functioning of the PSUs under them. Their managements should be accountable to the board and not to the ministry.If implemented, this would prevent PSUs from being treated like the private fiefdoms of ministers. They will no longer be required to make decisions like which brand of whiskey to stock in duty-free shops. Hopefully, this will also mean that PSUs will no longer be required to supply cars to ministers or foot their hotel bills. The committee has also recommended higher levels of confidentiality even with respect to Parliament. It has recommended empowering the PSU boards to take decisions about mergers, joint ventures, pricing, exports, appointments, selection of dealers, promotion and transfer of employees, and so on. The ministry concerned should not review the PSU more than twice a year. Instead, supervision should be done by sector specific supervisory boards. The report has also recommended that the government be given flexibility to divest its stake in PSUs. As long as the government’s stake remains above 51 per cent, it should not require Parliament’s permission to divest its shares — even in navratnas, mini-narvatnas, and consistently profit-making PSUs. This can be done through a board decision. For other Central PSUs, which do not belong to these categories, the committee has suggested that the government have full flexibility in divesting its share.The government should immediately implement the recommendations of the committee. This would be a step towards creating an environment in which PSUs can operate like professional business concerns. As long as the government is in the business of doing business, the least that can be done is is to run it like a business and not like a sarkari office.
