None of the PSUs will depend on budgetary support or government guarantees. The resources for implementing programmes should come from their internal resources or other sources. Likewise, proposals pertaining to capital expenditure or which involve higher investment should be prepared with the help of consultants and appraised by financial institutions.

The official announcement of the navratnas was made by former finance minister, P Chidambaram in his budget speech of 1997. Towards the end of July, the centre decided to recast the boards of these hand-picked PSUs by inducting professionals and officials as non-official part-time directors.

A search committee was set up for this purpose and its recommendations are believed to have been forwarded already to the administrative ministries concerned (petroleum and natural gas, chemicals and fertilisers, steel, industry, power and telecommunications). This committee was headed by the then chairman of the public enterprisesselection board along with the secretary of the particular administrative ministry and secretary, department of public enterprises.

There was also an "eminent" person(s) to be nominated by the then industry minister. The final selection based on the recommendations of the search committee was to be made by the administrative ministry concerned. The committee was also given the mandate to consider taking up other PSUs, apart from the navratnas, under its purview in its task of recommending these part-time directors.

The industry ministry made it clear in its notification that induction of these directors will precede any move to exercise autonomy/authority by these nine PSUs. Each of these corporations were to induct initially at least four of these directors who had an "impeccable stature and background." The number was to be more for those companies which had a very large number of functional directors.

Insight

A costly delay

Asking the oil PSUs to operate in a deregulated environmentwithout conferring autonomy on them is akin to asking them to fight the competition with one hand tied tightly behind their backs. The delay is an illustration of the limitations of granting autonomy -- bureaucrats will use every trick in the book to protect their turf. In the eighties, the New Zealand government tried granting autonomy under its State-Owned Enterprises Act, before realising that the conditions of private ownership could not be replicated under state ownership. Merely getting in eminent persons as directors on the boards of the navratnas does not go very far. Banks have had such outside directors for years, with few tangible benefits.