‘Boundary management is the most important challenge’
NEW DELHI: Prime Minister Manmohan Singh on Wednesday expressed concern over the time wasted by chiefs of public sector enterprises (PSEs) in ‘boundary management’ and sought to rectify the situation by easing bureaucratic and regulatory control and granting them full operational autonomy.
“It should be our endeavour to empower public enterprises by easing the bureaucratic and political hold of [the] Government over them, Dr. Singh said while releasing ‘The Indian CEO — A portrait of excellence,’ a book based on empirical research studies co-authored and published by executives of state-owned Bharat Petroleum (BPCL) and the London-based HayGroup, renowned HR consultants. Present at the function were Petroleum Minister Murli Deora, industry leaders and senior government officials
In agreement with the book’s conclusion that boundary management was the most important challenge facing the country’s public sector executives, Dr. Singh said: “I agree with an important conclusion of your study that the relationship between business and the Government as regulator needs to become more transparent, more predictable, less uncertain and less time-consuming.”
The book, co-authored by Signe M Spencer, Tharuma Rajah and Gaurav Lahiri of the HayGroup and S. A. Narayan and Seetharaman Mohan of BPCL, sought to point out that opacity and unpredictability of the regulatory process in the country were major entry barriers and a growth hurdle. In agreement here too, Dr Singh said: “I share your view that rather than interfere and control, [the] Government should be a stakeholder in functioning of a public enterprise.”
On the aspect of good corporate governance, Dr. Singh noted that PSEs should, in fact, be models for even private units to emulate and while granting full operational autonomy to them to compete and succeed in the global market, the Ministries concerned have a responsibility in ensuring compliance in this regard. “There is often the complaint that Ministries in fact encourage the opposite! Such instances should be brought to light and corrective action taken,” he said.
Referring to the book’s observation that “although the best public enterprise chiefs excel at empowering their people, they themselves are currently largely disempowered by the Government”, the Prime Minister said: “This must change and we must all create an environment that is conducive to this change being brought about sooner than later.”
Turning to the issue of privatisation, Dr. Singh pointed out that in the past few years far greater attention had been paid to privatisation rather than to the reform of PSEs. “While privatisation is sometimes driven by fiscal compulsions and also by efficiency considerations, it is also seen by some as a way of relieving public sector units of the burden of ‘boundary management.”’ Therefore, privatisation need not be the only solution to inefficiency of public enterprises. Relieving them of problems of boundary management and the burdens associated with them can also help improve their efficiency,” he said.