Govt plans asset buy policy for public sector cos

The proposed move will help firms acquire assets in oil, mineral resources

“In some sectors there is a need for our public sector enterprises to explore global opportunities. In particular, we need to step up our search for raw material assets. The government is working on a policy to support our public sector enterprises in this effort,” he said while addressing a function organized by the Standing Conference of Public Enterprises (SCOPE).

Department of Public Enterprises (DPE) Secretary Bhaskar Chatterjee indicated that DPE was working on the proposed policy based on suggestions made by concerned ministries including ministries of coal, mines and petroleum.

The draft of the policy would go before the Cabinet for approval in coming weeks, he said.

Reiterating government’s commitment to a strong public sector in many areas of the economy Singh said “our public sector enterprises have been doing reasonably well in an increasingly competitive and uncertain environment.”

“It is in no small measure due to the robustness and resilience of our public sector enterprises, and in particular, our public sector banks, that we did better than most other countries in weathering the global economic crisis which suddenly erupted in September 2008,” he said.

In an apparent reference to ongoing exercise for PSU disinvestment, Singh said more and more public sector enterprises were now entering the capital markets and receiving encouraging response from investors, including retail investors.

Referring to recent public issues of Coal India Limited and Manganese Ore India Limited he said “these have been hugely successful. This indicates the vitality and the inherent strength of our public sector enterprise and it also shows that our public sector is now ready to face the test of market scrutiny.”

Dwelling on the sensitive issue of corporate governance Singh said that the government was conscious of the need to ensure the highest standards of corporate accountability in the public sector.

“India is one of the few countries which have implemented the mandatory code of corporate governance in public sector. We have encouraged our central PSUs to adopt a robust and transparent management system,” he said.

Prime Minister’s remarks on corporate transparency assumes significance as it has come at such a juncture when the country is witnessing political storm over alleged irregularities in allocation of 2G spectrum in telecom sector. The surfacing of the 2G scam has raised questions over practices followed by some of the large industrial houses in influencing the policy making process of the government.

Stressing the need for retaining best talent in public sector to face growing competition from private firms Singh said the government had been encouraging PSUs to adopt a “robust and transparent Performance Management System.”

In this context he vouched for better incentives for PSU executives and workmen. “Measures such as performance related pay will result in sound practices for better corporate governance, which is of critical importance in today’s competitive environment,” Singh suggested.