Re­form Pub­lic Sec­tor En­ter­prises

S K Roongta panel’s pro­pos­als still valid

The Economic Times - - The Edit Page -

It is rather un­for­tu­nate that re­form of pub­lic sec­tor en­ter­prises (PSEs) re­mains on the pol­icy back-burner for the Modi govern­ment. Note that the lat­est avail­able fig­ures re­veal that of the 235 op­er­at­ing cen­tral PSEs, as many as 77 are loss-mak­ing, with the losses adding up to over 27,000 crore for 2014-15. Profit-mak­ing PSEs are be­ing asked to men­tor and turn­around loss-mak­ing ones. We surely need more vi­able, con­crete plans. Mean­while, the re­port of the ex­pert com­mit­tee on PSE re­forms, headed by for­mer SAIL chair­man S K Roongta, has been gath­er­ing dust since Novem­ber 2011. Note also that early last year, the min­is­ter for heavy in­dus­tries and pub­lic en­ter­prises Anant Geete was quoted as say­ing that the govern­ment is ac­tively con­sid­er­ing the rec­om­men­da­tions of the Roongta panel, sub­mit­ted in Novem­ber 2011.

The com­mit­tee did make a num­ber of sen­si­ble sug­ges­tions, on board-led man­age­ment of PSEs, the ap­point­ment of in­de­pen­dent di­rec­tors and the need for higher com­pen­sa­tion linked to profit be­fore tax. On loss-mak­ing PSEs, the Roongta re­port specif­i­cally rec­om­mended the auc­tion route (limited to PSEs), so that profit-mak­ing PSEs could bid and take them over. The panel, rightly, was of the view that the bet­ter-run PSEs would be in a po­si­tion to cre­ate new busi­nesses by lever­ag­ing ‘ex­cel­lent in­fras­truc­ture’ that many of the loss-mak­ing PSEs do pos­sess.

The Roongta com­mit­tee also sug­gested that the sur­plus land avail­able with loss-mak­ing PSEs be used to setup a land bank and called for set­ting up a Pub­lic Sec­tor Land De­vel­op­ment Au­thor­ity. The govern­ment needs to bet­ter strate­gise PSE ra­tio­nale. In many emerg­ing ar­eas of tech­nol­ogy, which have lumpy cap­i­tal re­quire­ments, such as the next-gen­er­a­tion tele­com net­works or high­end sil­i­con chip de­sign, and where the In­dian pri­vate sec­tor re­mains chary of in­vest­ing, we clearly need the right vi­sion, en­trepreneur­ship and scal­a­bil­ity in PSEs. A tech­nol­ogy pol­icy for PSEs is what the Roongta re­port en­vis­aged, and the Modi govern­ment now has the op­por­tu­nity to give it con­crete shape.

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