PESB may get more say, freedom from ministries

Written by Subhash Narayan | New Delhi | Updated: Dec 17 2013, 10:26am hrs
In a reform move aimed at restricting the role of the political executive in the appointment of top-level executives of public sector enterprises, the Centre is planning to give statutory powers to the Public Enterprise Selection Board (PESB).

The idea is to make PSEB's decisions on such appointments final without any need for formal approval from the administrative ministry and the minister concerned.

The department of personnel and training is giving final shape to a proposal. The filling of PSE vacancies with suitable candidate at a much faster pace would be achieved with the change in addition to ensuring that these firms get the people with domain knowledge in the respective fields, government sources told FE.

PESB currently functions as the selection body for PSU executives under the department of personnel and training.

While it identifies executives for filling vacancies, conducts interviews and finalises suitable candidates, the process is completed only after the name is approved by the administrative ministry and a final clearance is taken from the Appointments Committee of Cabinet (ACC) headed by the Prime Minister.

Sources said most delays in filling of vacancies takes place at the stage of getting the approval of the administrative ministry and the minister. Not only the PSE have to suffer from delays in appointments but often political considerations weight over economic rationale in several selections robbing the companies of an able management team.

We need to change the process of appointment of independent directors removing the role of administrative ministry in their selection. Under the current system, such directors are dependable independent directors whose loyalty is clearly towards the ministry, director-general of standing conference of public enterprises (Scope) UD Choubey told FE.

Scope is an apex body of central government-owned public enterprises.

The changes are expected to be revolutionary as PSE could help to get both functional and independent directors of the caliber required by the company and not one who owes allegiance to political masters. NHPC is without a full-time head for last three years while CIL had to postpone crucial decisions as its vacancies of independent directors could not get coal ministry's approval in time.

Power generator NTPC has also found certain projects being thrust upon it by administrative ministry with the support of independent directors even though the company's management and functional directors did not approve of these projects.