The Hindu Business Line : PSU — paradox or dream?

GOING BY HIS latest pronouncements about public sector units (PSUs), the Prime Minister qualifies eminently for the famous definition of a superior mind that can at once hold two opposing ideas in balance. The PSU must be managed efficiently. It must be free to enter the capital market. Yet it must discharge its social commitments. All steps must be taken to revive the spirit of the Memorandums of Understanding and grant greater autonomy to the management of the much-decorated Navratnas in commercial decisions. Yes, and they must be globally competitive; we must recall Nehru's caution about the fundamentally different compulsions that drive the functioning of the government office and the factory — in time management and decision-making. Above all, it must retain its PSU character. And, there is no `earth shattering' hurry for privatisation. What Dr Manmohan Singh carefully refrained from was defining the contours of this character. No doubt, the Left will readily fill in the blanks. Yet, the average reader is no stranger to it. For him most PSUs are bloated, procedure-bound, not to mention full of leaky places and corners to be greased.

On top of everything else they are under the sway of a domineering, and appropriately called, `parent ministry', which helps itself to not just jobs for the favoured but also various other perquisites of which travel and hospitality for the retinue is but the most innocuous. As long as the government does not limit itself to playing the role of a major shareholder and stops with key appointments and lets them get on with both strategy and operating functions, and in return demands profitable, dependable performance, the list of opposing ideas will remain just that: Intellectually stimulating and very little else. Life has, of course, more paradoxes than linear, mechanically solvable problems. And the greatest gift of the administrator is managing the tension of opposing criteria, which is endemic in coalition politics.

But the global market place is an unrelenting and demanding master from which, to quote the Prime Minister again, there is `no running away'. Its logic is unforgiving, its signals loud and clear. The price mechanism above all else would determine the top- and bottom-lines of any business, and globally aspiring PSUs can be no exception. The essence of managerial freedoms is the liberty to control input material and costs, output and prices, keeping quality standards ever higher. All of which require the PSU to behave as a business first and last. Not a business today, ministerial extension tomorrow, or charity the next day. Some critical decisions aside — location and employment of the underprivileged, for example — PSU managements must march to a very different drum. Another co-ordinating authority would only muddy the waters further and cause endless drift towards PSUs that are neither fish nor fowl.