It's been around 25 months since I am working in a public sector undertaking(PSU) so now I am in very comfortable position to say something about the public sector and it's contribution to the economy of India.
Prior to the economic reform of 1991 we were relying mostly on the PSU for the most of the industrial production as well as the major employer . But the question is despite being in the system since the independence and having the best resources, govt can provide, today none of the PSU is in position to compete with private players in their corresponding field. Following reason I cite which might have acted for that to happen.
Prior to the economic reform of 1991 we were relying mostly on the PSU for the most of the industrial production as well as the major employer . But the question is despite being in the system since the independence and having the best resources, govt can provide, today none of the PSU is in position to compete with private players in their corresponding field. Following reason I cite which might have acted for that to happen.
- PSU's are the brain child of Mr. Nehru who envisages them as a major employment provider for the people of India ( thanks to his socalistic mindsetup) and not as the catalyst for the industrial growth. Job security was assured in PSU, people were having no fear about loosing their job, and unfortunately this trend is still being continued and that was the biggest factor behind people lacking the productivity in PSU.
- Govt is still directly involved in day to day decision making of PSU's and thus made them handicapped, NACIL ( entity after merger of Air India & Indian Air Lines) can be cited here as a best example , company is working in higly competitive aviation sector where most of the private players are run by highly profficent manager who are having vast experience in this field but NACIL is headed by an IAS who is barely having any experince of this field. Consequence of this mismangment is quite apparent as govt is forced to infuse a considerable amount of money for the revival of NACIL.
- Many of the PSU's are overcrowded so theses have to shell out a large sum money as a salary for their employess . NACIL has around 140 employees per aircraft it owns against the global standard of less than 100 employees per aircraft.
- fragile labour law's are also acted into this mess, most of the PSU's are having a large number of worker unions, which can take them on ransom at any time they want.
But diffrent side of story is that PSU's acted as biggest shield to prevent this country to fall in the one of the biggest recession. as most of the fields like insurance, banking , refining, are dominated by the PSU's so we did not faced the ripples of the recession that much as PSU's are not exposed to the new kind of risk associated with the prviate players working in that particular field. But this can not be taken as a excuse to get rid of the major changes required in the working style of PSU's. Govt and the managment of PSU must act together to sort out the irregulatries in the existing system if we want PSU's to survive in the era of globalization.
Here is my idea on how to goad the slow moving mammoths to a rampaging beast- Restucturing of loss making PSUs must be implemented strictly.The government should judiciously disinvest stakes in the PSUs & privatise the loss making ones if restructuring fails. For that accountability measures need to be addressed.Now that the Left Parties are out of government ,the Centre should amend the labour laws attenuating the irksome elements without being lured to the vicious cycle of votebank politics.Even though the entry level remuneration in select PSUs is attractive ,the ascension in the paypackets in higher grades is not high enough to retain the talents.This issue should be addressed too.Performance linked financial incentives need to form a major part of ones salary.In short Meritocracy & Accountability must be imbibed in the PSU culture.
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