Nailing the Board

In a cynical bid to use PSUs for political ends, the finance ministry has 8212; as reported by The Sunday Express 8212; appointed seven Congress politicians as 8220;independent directors8221; to boards of PSU banks. Further reports suggest that more appointments of this kind are in the offing. Similar appointments had been proposed by the UPA government for oil PSUs. These were fortunately stopped after this newspaper had reported on the issue.

Independent directors receive Rs 5,000 per board meeting in addition to travel and stay. It is not this so much as the fact that they exercise undue influence on the bank and its policies that is highly objectionable. Such appointments increase the influence of the ruling political party on public money. What is disturbing is that the finance ministry appears almost blase about this development. Officials are reported to have said that among the appointments made two years ago there might have been many NDA/BJP names. The wrongs committed by the earlier regime are cited to make the latest appointments appear acceptable, and public sector companies continue to be treated as fiefdoms 8212; not only of the ministries under which they operate but also of the party in power. This is ironic, coming as it does shortly after Sonia Gandhi presented her colleagues with a new code of conduct.

It is vital to state 8212; urgently and emphatically 8212; that the country needs to get PSUs out of the clutches of politicians. This also means getting them out of ministries and the government. The public8217;s money should not be used for political ends. Moreover, when politicians are appointed as 8220;independent directors8221;, they rarely come with the expertise and knowledge necessary for effective leadership of PSUs. The Congress should not only stop any further appointments of politicians to PSU boards, Sonia Gandhi should enlarge her code to ensure that such appointments are not made in the future. Further, any appointments of independent directors of PSU boards made by the government should be placed in the public realm through the websites of the relevant ministries. Sonia Gandhi8217;s code of conduct and the Union government8217;s Right to Information will become meaningful only if the UPA shows that it will use them to prevent any misuse of power by any political party 8212; including itself.