The Hindu Business Line : Govt to promote risk taking, innovation in public sector

The Prime Minister, Dr Manmohan Singh, on Tuesday said his Government wants to create a culture that rewards risk taking, innovation and product development in the public sector, so that it can compete effectively on the global plane.

"We must work to put them on a sound financial footing, by giving them opportunities to restructure and rationalise, enter into public-private partnerships and build on core competencies," Dr Singh said, while delivering the Golden Jubilee address at the Administrative Staff College of India (ASCI), here.

To achieve this, it is necessary to review the governance structure of public sector undertakings, while maintaining accountability to Parliament. The fear of vigilance should not deter good managers being creative or enterprising, Dr Singh said.

Unlocking PSUs' value

The Prime Minister's remarks came after he pointed out that the Government had invested significant national resources in building a sizeable public sector, but the productivity of investment locked up in public sector was low. "We need to unlock this investment potential if the country had to benefit from the past investment," he said.

Stating that the recent positive turnaround in the performance of the Indian Railways needed to be sustained, the Prime Minister said there was an urgent need to tone up the management of other large public sector undertakings, including the Food Corporation of India, oil PSUs and State Electricity Boards.

On opportunities provided by world markets, the Prime Minister said, to derive full advantage India must improve infrastructure, enhance capacity to be part of global supply chains, keep inflation and interest rates low among a host of other measures.

While our economy has shown the ability to develop new products and services, it is handicapped by low levels of research and development. India's share in scientific research worldwide is less than 1 per cent and has been declining.

The public and private sectors need to play their due role to enhance this, he added.

Delving on the new mantra of inclusive growth, Dr Singh said public-private sector partnerships could help. In the improvement of public delivery services, be it hospitals, schools, water and sanitation or power supply, while the partnership is necessary, the Government cannot abdicate its role. Similarly, reform in municipal administration, strengthening of panchayati raj institutions and management of public utilities merit greatest attention.

While on the growth story, the PM said at the present rates of growth, the industry was facing huge skills shortage. This shortage was not limited to high tech sectors but also basic skills such as plumbers, electricians and nurses.

"We are opening new institutions at various levels of the knowledge pyramid, with particular emphasis on a Vocational Education Mission, to meet this skills shortage", he added.

Praising the role played by the ASCI in its 5 decades, Dr Singh urged the faculty to take up these emerging challenges to train and prepare the manager's of today and tomorrow. He announced that the Centre had sanctioned a Rs 5 crore interest free loan to the Institute.

Earlier, Dr M. Narasimham, Chairman, Court of Governors of ASCI, and former Reserve Bank of India Governor, in his opening remarks recalled that 50 years ago ASCI was an example of public-private partnership as the Centre and the corporate sector were responsible for its origins.

Dr S.K. Rao, the Director-General of the Institute said, a new campus was being constructed in the city to meet the growing demands.