Managing Challenges in Public Enterprises

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U D Choubey
Director General,
SCOPE (Standing Conference of Public Enterprises)

“Officials in PSEs don’t take their job as only a means of earning money, for them it is also a mission,”

What is the mandate of Scope? How did scope come into being?
Standing Conference of Public Enterprises (SCOPE) was formed through a cabinet decision in 1973. It was formally recognised by the Government of India on 8th November 1976 by a decision of Union Cabinet. SCOPE is an apex professional organisation representing the Central Government Public Enterprises. It has also some state enterprises, banks, and other institutions as its members. SCOPE’s objective is to promote excellence in organisations where public investment is involved, in order to enable them to be globally competitive. Today, there are 248 Centre Public Sector Enterprises (CPSEs) in India and they have an investment of 6 lakh 61 thousand crore in the present day.

In your opinion, how far has SCOPE succeeded in fulfilling the mandate for which it was formed?
I must say that given the mandate of the Government of India, SCOPE has been remarkably successful. In the last two–three years, the initiatives taken by SCOPE have resulted in lot of processes getting reformed for the Public Sector Enterprises. For instance, recently we met the Prime Minister of India. At the meeting  25 CPSE chiefs spoke about the issues that need to be tackled for bringing improvement in the operations of public sector enterprises.

What are the major challenges that the Public Sector Enterprises are facing?
There are a lot of challenges, but the Public  Sector Enterprises are capable of facing all of them. Sometimes we face issues regarding the stressed targets that are fixed at such high levels that they are impossible to achieve. At times, the targets get fixed without taking into account the contingent factors. For instance, if BHEL doesn’t supply the turbine, NTPC will not be able to be able to get the plant commissioned. We are discussing this issue, and it has been decided that the target setting must be on more realistic levels. SCOPE has also taken up issue of MoU. There should be a review of the MoU factors in ever y six months. The administrative ministry does the QPI, Quarterly performance, every three months. There should be an alignment to things in QPI and MoU.

At times questions regarding autonomy of the board have also been raised.
That is right. SCOPE is taking up the issue that there should be a separation between ownership and the management. The board should not be considered to be an extended arm of the Government. The management should be allowed to take all the decisions that are in the best interests of the PSE without any external interference. There is also the issue of RTI. Now RTI is a good thing, people should have the right to information on every kind of subject. But the RTI initiative should not be allowed to become a tool in the hands of those who want to slow down the working of the PSEs. It is time we did some review of the RTI Act to ensure that continues to be advantageous to the common citizens.

What about Corporate Social Responsibility (CSR)? Should the PSEs be doing it by using the same kind of resources that the private companies use?
I can tell you that Public Sector Enterprises have willingly accepted that they will make a 2 percent CSR contribution. Currently the CSR contributions from PSEs is in the tune of Rs. 1500 crores. In general, the PSEs are doing quite well in CSR. PSEs like NTPC, GAIL, IOCL, HPCL and others are contributing a lot in the area where they are located. They make lot of contribution in education, taking care of orphans, and in providing skills related training to people.

In the private sector the CMD’s and Directors tend to get fairly high salaries, while the salaries of CMDs in PSUs are quite less in comparison. Should something be done to bring the salaries of PSE leaders at par with what the private sector is paying?
SCOPE has taken up this point with the government. We want that there should be parity with private sector in the matters of salary and perks. However, we also realise that whatever the PSUs earn goes to the government and is finally used for the upliftment of the people. The CMDs and other officials in PSEs don’t take their job as only a means of earning money, for them it is also a mission. They want to work for the betterment of all citizens.

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