Global Economy

CPSEs can be globally competitive if government, management roles spelt out: CII

NEW DELHI: Central public sector enterprises (CPSEs) can become globally competitive if the roles of the government and management are clearly specified and they are allowed to function independently, according to a report by the Confederation of Indian Industry.

The report, set to be released on Monday, recommends that the government inform the top management of CPSEs about its disinvestment plans, a press release by the CII said.

“Given the current environment of divestment uncertainty, it is critical to apprise the CPSE top management in advance, about a decision on this,” the release stated.

The report highlighted the importance of clearly demarcating the roles of government and top management to avoid “excessive interference” or “passive ownership” by the former. “India’s public sector enterprises can become globally competitive,” Chandrajit Banerjee, Director-General, CII said in the release.

The CII also called for an industry expert-led board to take all strategic decisions to increase the speed and efficacy of decision-making to “transform CPSEs from being ministry-driven to board-driven”.

The report also calls for the board to handle both operational and personnel-related decisions, including recruitment, promotion and compensation of employees.

It says PSEs often face “contradictory objectives” and that the government should clearly outline their priority for each PSE.

Excessive scrutiny from the Central Vigilance Commission and the Comptroller and Auditor General of India, coupled with the threat of investigation by the CBI, was leading to stalled or overly cautious decision making at CPSEs, it pointed out.


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