Time for next phase of public sector reforms: PSU chiefs

New Delhi, Dec 15 :

It is time to initiate the next phase of public sector enterprise (PSE) reforms in the country to enable them to become multinationals, the Confederation of Indian Industry (CII) said here.

“This was the overall view expressed at the Global PSE Summit organised by the CII and the Department of Public Enterprises, Ministry of Heavy Industry,” CII said in a statement.

According to CII, the chairman of state-run oil marketer Indian Oil (IOC) R.S. Butola was of the view that a key PSE reform was a reworking of their compensation structures so that these units compare well with the structures prevailing in the private sector.

Calling for the separation of PSEs’ ownership and management so they could function more as a commercial entity, Butola said this reform would not necessarily be privatizing the company. China and Russia have separated ownership and management very effectively, he said.

According to a CII-KPMG report “PSEs in India: Transformation, Empowerment and Sustainability” released on the occasion of the summit, China has established a state-owned Assets Supervision and Administration Commission (SASAC) “which launched a process of redefining the relationship between the central government and the so-called ’central enterprises’.”

The foremost challenge of Indian public sector enterprises today is to increase their competitiveness to deal with market forces, President Pranab Mukherjee said inaugurating the PSE summit earlier in the week.

Pointing out that the government had taken a number of measures to help PSEs become more competitive, including grant of managerial and commercial autonomy, the president said more reforms are needed, one of which could be to allow listing of more PSEs on stock exchanges when the market is stable. (IANS)