The Hindu Business Line : Manmohan urges more PSEs to go public

EMPOWERING PSUS: The Prime Minister, Dr Manmohan Singh, with the Minister for Heavy Industries, Mr Santosh Mohan Dev, at the conference of chief executives of Central public sector enterprises on `Empowering Public Sector for Growth' in the Capital on Thursday. - Kamal Narang

New Delhi March 8 In an indication that public sector enterprises (PSEs) would be empowered with greater operational flexibility in terms of financial and managerial decisions, the Prime Minister, Dr Manmohan Singh, on Thursday asked them to learn from their private sector counterparts and seize opportunities for mergers, acquisitions, amalgamations, takeovers and creating new joint ventures.

Suggesting that the Government would like more PSEs to go public, Dr Singh said, "It may be useful for more public enterprises to be listed on the stock exchange, as this would enhance professionalisation of the board of directors and empower the independent directors."

"Induction of independent directors on the boards of PSEs would, I believe, ensure greater efficiency and effectiveness in decision-making processes as well. We must, therefore, pay greater attention to how we identify independent directors and ensure that they are indeed truly independent professionals who bring with them both expertise and a reputation for good governance and high professional conduct," he said.

He added that it should be an integral part of their business strategy to create value for their shareholders, become cost effective, reduce the cost of finance and increase their market share.

Reiterating that revitalisation of the public sector is an integral part of the Government's strategy for promoting "inclusive growth", the Prime Minister said that the total number of loss making PSEs had fallen from 79 to 58 last year and urged the Board for Reconstruction of PSEs to come forward with time bound programmes for the revival of sick PSEs. "It must help the Government take an early decision on all pending proposals," he added.

Inaugurating the annual conference of chief executives of PSEs organised by the Standing Conference on Public Sector Enterprises (SCOPE), the Prime Minister pointed out that it was wrong to assume that entrepreneurship was to be found only in the private sector. "Public enterprises too, can and must foster entrepreneurship. But this requires an environment that encourages risk taking, empowers professionalism and offers adequate freedom to the chief executive and his or her senior management to take quick and difficult decisions.

"Excessive regulation restricts entrepreneurial drive and makes management risk averse. That is not the way to go forward in the fast changing world full of uncertainty — the overall environment in which our enterprises operate," Dr Singh said. He also stressed the need for improved corporate governance in the public sector and adherence to code of corporate ethics and conduct.

Regarding the state-level public enterprises, Dr Singh emphasised the need to find viable means to revive and sustain such enterprises and ensure that the interests of workers and employees are not hurt due to political interference and bad management.

Dr Singh said that the Centre is working towards limiting the role of the administrative ministries in the day-to-day management of public enterprises. "I believe that many joint ventures and alliances both between public enterprises and between public and private enterprises are being worked out. That truly is a healthy development. Such joint ventures and public-private partnerships can help the public sector benefit from the private sector's competitive advantages wherever it might exist," he said.

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