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New Delhi, Sept 4: Autonomy to public sector units (PSU) rather than outright government divestment can be a better solution in improving their performance, YC Deveshwar, chairman, ITC has said. Instead of the PSU management reporting to a single minister or secretary, let it be accountable to a group of professionals, Deveshwar suggested.
he professionals may be appointed through a rational and objective procedure rather than handpicked by the political bosses, he added. "Who owns a company is not important. What is more relevant is the freedom to the management." Once the management is given freedom to take commercial decisions, the results from state-owned enterprises would certainly improve, Deveshwar said speaking at a seminar organised by the Federation of Indian Chamber of Commerce and Industry here.
However, he was not in favour of government divestment when there are other options of removing political interference from the day-to-day management of the PSUs. When Deveshwar was mooting forcontinuance of PSUs, albeit with more autonomy, department of public enterprises secretary S Narayan laid out two more major areas for PSUs-biotechnology and venture capital funds.
"Public sector investments should enter those sectors where investments are not forthcoming and after nurturing the areas for few years, PSUs should exit at an appropriate time," he added.
These comments from a leading professional and a top official in the industry ministry assume significance when the government is hurrying to achieve its Rs 10,000 crore divestment target.
Participants at the seminar agreed that state enterprises, like the private sector, will have to extensively use the services of consultants to restructure their businesses in the context of increased liberalisation. On the other hand, the consultants will have to give recommendations which are practicable and implementable, they added.
"The consultants will have to keep in mind the milieu in which the PSUs are working while making suggestions fortheir revamp".
Citing a case in point, participants said the Mckinsey's proposal to close down steel major SAIL's uneconomic and loss-making alloy steel plant at Durgapur was rejected following strong protests from employees and trade unions.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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