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Tuesday, May 26, 2020

Indecisiveness key reason for slow growth of PSEs: Plan panel body

A Planning Commission panel has identified indecisiveness on the part of the Public Sector Enterprises as one of the key reasons for their slow growth.

Written by Priyadarshi Siddhanta | New Delhi | Published: June 26, 2011 1:03:01 am

A Planning Commission panel has identified indecisiveness on the part of the Public Sector Enterprises (PSEs) as one of the key reasons for their slow growth.

In its blueprint to make them more viable and competition-oriented,the Steering Committee on Industry for the 12th Plan period has prescribed the need for setting up an ombudsman type institution to help them shed their inhibitions. It has also suggested that the Comptroller and Auditor General (CAG) should factor in the losses sustained by PSEs on account of their indecisive approach instead of financial losses.

Set up under the aegis of Commission member Arun Maira,the Committee in its recent meeting has observed that PSEs are indecisive and bound by a high degree of documentation procedures to convincingly prove that all decisions taken by them were for public benefit.

It argued that a general feeling about the state-run enterprises being unable to meet the growing challenges has arised from their inability to overcome risk-aversive approach.

“So there is a need to establish an ombudsman-type institution to help PSEs overcome this approach,” the panel concluded.

“The state has the attitude of treating the producers as dishonest which has lead to unhealthy relationship between the state and producers. Hence,there is little consultation between the state and the producers and there is no support from the state to producers which is one of the reasons of low growth of India’s manufacturing sector. The relations between the various stakeholders is full of suspicion and distrust,largely stemming from the political ideologies,” Commission sources said.

The committee also said that the current audits of the CAG were focused on losses,which have been made from decisions taken earlier. “But potentially one should alternately look at the losses,which have been made as a result of indecision,” the Plan panel said. The steering committee also pointed out that currently the state-run companies are protected to a certain degree from competition but there was a need to explore ways on how to strengthen them to face competition and help them thrive in a competitive atmosphere.

Sources said that the country’s system involves a lot of complications in setting up a manufacturing unit resulting in lack of interest in setting up a unit.

Further,bureaucratic ways of functioning and the system of administration leads to resistance to change and unwillingness to take necessary steps to improve the manufacturing sector.

The sources argued that the planning process in the country lacked the analytical approach towards the development objectives and measures. In India the emphasis has been on collecting many opinions and then adopting an approach of balancing all these opinions,rather than the most impactful ones.

“This has lead to insufficient growth of manufacturing in India. There is a need for India to make hard choices,and perform appropriate systems analysis to ensure that policy does not become the lowest common denominator,” the panel concluded.

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