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Friday, Nov 14, 2003

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Pressures on PSUs

ARE PUBLIC SECTOR enterprises subject to the pulls and pressures of ministers? It would appear to be so going by the Prime Minister, Mr Atal Bihari Vajpayee's clarification that the Central Vigilance Commissioner had, at his meeting with him, not named any specific minister. (If the Cabinet Secretary is to be believed, the CVC came to appraise the latter about the year-old restructured vigilance apparatus.) This only implies that the meeting did bring up the subject of ministerial interference in public sector enterprises. And, if, indeed, the discussion was only about the bogey of `vigilance' in the minds of public sector management, where was the need to form a committee of secretaries to devise ways of insulating these enterprises from unwanted ministerial pressures?

But no matter what gloss the Government may seek to put on the meeting between the Prime Minister and the CVC, the fact remains that public enterprises, in general, and their CEOs, in particular, are vulnerable to ministerial pressures. While insulating them effectively from such interference will remain a daunting challenge, some of the proposals in this regard are clearly misconceived. One idea doing the rounds is to confer fixity of tenure for the CEO appointees so that they are free to concentrate on the business of governance. Quite apart from the larger, adverse implications for corporate governance from such a proposal, it does seem strange that at a time when the Government is thinking of instituting a hire-and-fire work culture it should think in terms of conferring security of employment on the chief executives of enterprises! If the idea is to build in safeguards by which the government can still dispense with the services of an executive while reassuring him of protection against unwanted ministerial interference, it is bound to fail. For it is precisely those safeguards that would be invoked by a minister to harass an executive not bending to his will.

While administrative reforms are welcome, it will not do to ignore the root cause for ministers to collect funds for the party: The emphasis on mass mobilisation as the means of political discourse. Whether it is fighting elections or opposing administrative actions of the government, mass mobilisation has become a ubiquitous weapon. So, even if there is no motive of self-aggrandisement, the temptation of ministers to milk public enterprises under their administrative command is dictated by the need to confirm their own relevance in the party hierarchy even as they fulfill the mundane chore of keeping the party well funded. The culture of street-level protest or mass mobilisation might have been appropriate in the context of throwing off the imperial yoke. In any case, that was spontaneous and so did not impose any costs on those who were orchestrating it. But mass mobilisation with the sole aim of creating an artificial sense of public discontent is not only playing havoc with the process of India evolving into a mature democracy, but is also corrupting the system. This needs to be addressed as well.

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