Government must give PSUs more flexibility: Amitabh Kant

NEW DELHI: State-run companies need to be kept at an arm’s length from their administrative ministries and should be given more freedom and flexibility, said NITI Aayog CEO Amitabh Kant.

"Make in India will not succeed without the public sector and it needs to be given more freedom and flexibility. The government must keep a hands off approach and increase professionalism," he said at an event here.

Finance minister Arun Jaitley had said in his Budget 2016 speech that NITI Aayog will identify public sector units (PSUs) for the strategic sale. The government aims to collect Rs 56,500 crore through disinvestment in PSUs this fiscal.

“We need to bring in outstanding professionals as directors on the board. The management needs to bring in innovation, structure and take on the world,” he said, adding that private and public sector companies must be treated same and that PSUs should be allowed to die if they fail to compete.

Kant also questioned the current system of evaluation of CPSEs. “The current MoU system needs to be done away with,” he said.

The Department of Public Enterprises, a nodal agency for all central public state-run companies, enter into a memorandum of understanding (MoU) with PSUs, and their administrative ministries on their expected financial and non-financial targets for the fiscal.

Earlier this month Country’s top auditor, Comptroller and Auditor General of India (CAG) had pointed out that 24 central public sector enterprises (CPSEs) did not issue bonus shares despite have free reserves in excess of their paid up capital. In its audit report, the CAG has noted that in case of eight CPSEs, managements are yet to amend Articles of Association to provide for buyback of shares.