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Industry is one of the major contributors to the fast growing Indian economy. Overall industrial production in the country has been showing a rising trend in the current year. Industrial production grew by 6.9 per cent in 2003-04. The first 6 months of the current year i.e. April-September, 2004 recorded a growth of 7.9 per cent as compared to 6.2 per cent during the same period last year. The overall sectoral growth particularly in the capital goods sector has recorded a growth of 14.5 per cent in the period April-September 2004.
Heavy Industry and Public Sector Enterprises (PSEs) play a pivotal role in almost all the sectors of the economy, including those of infrastructure, such as power, rail and road transport. They cater to the requirements of equipment for basic industries. They are also responsible for the development of a wide range of intermediate engineering products like castings, forgings, diesel engines, industrial gears and gearboxes. One of the major industrial sectors in the county is the automotive sector that has been showing a substantial growth during the last few years since the opening up of this sector in 1993. In fact till today, the focus has ostensibly been on capital goods and engineering industries including auto industry.
As per the policy on Public Sector contained in the National Common Minimum Programme (NCMP) of the United Progressive Alliance (UPA) Government, various steps have been initiated in terms of restructuring and revival of sick Public Sector Enterprises as also to provide autonomy to the profit making ones.
Redeeming its pledge in the NCMP to revitalize the public sector, the Government has sanctioned an amount of Rs.517 crore as the first tranche of money required for restructuring of 24 ailing PSEs under the Department of Heavy Industry. This sum is to be used for payment of long outstanding statutory dues such as provident fund, gratuity, pension, Employees State Insurance, bonus and salaries and wages of over 45,000 employees of the loss making PSEs. This decision is in furtherance of the Government’s commitment to a strong and effective public sector whose social objectives are met by its commercial functioning in a competitive environment.
With a view to implementing the mandate as per NCMP, the Government has approved the establishment of a Board for Reconstruction of Public Sector Enterprises (BRPSE). This Board would address the entire gamut of issues pertaining to revival/ restructuring of public sector undertakings. It would also advise the Government on measures to strengthen the public sector undertakings in general and making them more autonomous and professional. The Board would also be monitoring incipient sickness in the Central public sector undertakings (CPSUs) and suggest ways and means and sources for funding the revival and restructuring packages. The recommendations of the Board shall be advisory in nature. The administrative Ministries concerned with the relevant public sector enterprises would reflect the recommendations of the Board in their proposals to be submitted for consideration and approval of the Government.
The Government has recently taken a number of steps to improve the performance of public sector enterprises. These are providing delegation for mergers and acquisitions as also for reestablishment of joint ventures and subsidiaries, strengthening the system of Memorandum of Understanding (MoU) by incorporating additional parameters such as measurable Productivity, International Benchmarking, increased payment of ex-gratia amount under Voluntary Retirement Scheme (VRS) to employees in the CPSEs following the Central Dearness Allowance pattern of pay scales, Human and Resource Management.
The Government is also in the process of implementing a number of measures to strengthen the profit-making CPSUs which include providing greater financial autonomy, professionalisation of Boards, delegating enhanced financial powers, adopting Corporate Governance practices, review of Nava Ratna and Mini Ratna Schemes and extension of Purchase Preference Policy.
‘Changes with a human face is the watchword of the new UPA Government. The Minister for Heavy Industries & Public Enterprises assured recently that the interest of the workers would be of paramount importance and the legitimate dues of the workers would be cleared before any decision for closure or winding up of sick PSEs was taken. With ‘perform or perish’ regime in place, the PSUs can no longer be perceived as the "white elephant" of the Government.
*Information Officer, PIB, New Delhi
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