Manufacturing body wants bullish PSUs

Two weeks into the ongoing squall over independence of the public sector and their heads, the NMCC draft says that all procurement, sales, marketing, pricing, recruitment, salary, technology transfer and labour laws of PSEs are under its scanner, and that it will recommend ‘‘necessary changes’’ to ‘‘make PSEs globally competitive.’’

The strategy paper recommends full managerial and commercial autonomy to the public sector and ‘‘appropriate’’ powers to their boards to pursue joint ventures, mergers, acquisitions and technology acquisitions.

The present guidelines and procedures on sourcing decisions ‘‘tend to make PSEs globally uncompetitive… Hence there is a need for reaxamination of extant policies laid down, by the CVC,’’ says the draft.

The draft says there is a need to ‘‘rationalise and optimise’’ the multiple review mechanisms that burden PSUs and take ‘‘corrective action’’ against imbalances in PSU labour cost and productivity. ‘‘Most of the government guidelines and procedures tend to have been evolved over the years for PSEs carrying out production and sales in a protected domestic environment. These tend to make PSEs globally uncompetitive and slow when applied to export/import,’’ it says.

Even ancillary units of PSEs need to be competitive, the draft says. These units could be in India or outside, but they ‘‘need to be competitive.’’ ‘‘The PSEs have to work towards this goal of procuring he best quality goods at the most competitive prices to retain their own competitiveness,’’ the draft says.

Even the purchase/price preference has been ‘‘questioned by some on economic grounds,’’ which would need to be reviewed in the overall context, NMCC points out.

As prescription, the Council looks to the Group of Experts, whose recommendations on ownership, autonomy and delegation of powers are with the government and to the Board of Reconstitution of PSEs, which has been making recommendations on specific cases.