PSUs pitch for freedom from Govt pay structure

To attract bright candidates, Central Public Sector Enterprises have urged the Government to de-link compensation packages from the existing remuneration structure. They have also pitched for separation of the ownership and management of public sector units .

Taking part in a round table, Indian Oil Corporation Chairman R. S. Butola said, “today, PSUs are not the first choice for students passing out from top institutions such as the Indian Institutes of Management (IIMs) or Indian Institutes of Technology (IITs). One of the key reasons is compensation.”

However, he noted that after the global recession of 2008, PSUs have started attracting good talent from these institutions. Remuneration, however, continues to be an issue, he added.

Ownership issues Participating in the discussion, Nalin Singhal, Chairman and Managing Director, Central Electronics Ltd, said the approvals are multi-layered for recruitments in a PSU and, are thus, time-consuming . This round table was a part of Global PSE summit organised by the CII in association with Department of Public Enterprises. There is, in fact, a huge difference in the remuneration of even the top officials of Government-owned companies and private ones, as the annual reports of various listed companies show.

Citing examples of countries such as China and Brazil, Butola mentioned that although these countries have public sector enterprises, their management is different from ownership. Central Ministries do not interfere in the regular operations of these companies. “The result is, companies there are growing to become world leaders. For example, Petrobras (the oil major in Brazil) is considered to be best at the global level in terms of deepwater exploration technology.”

Adil Zainulbhai, Chairman, McKinsey India, was critical of the way the Government funds PSUs. He said that in the private sector, if one company does not perform, it will perish, but even if a public sector company does not perform, it gets many opportunities to survive. Currently, 66 companies out of 260 public sector units (excluding seven insurance companies) are loss making.

shishir.s@thehindu.co.in