Cabinet to mull over greater autonomy to PSUs

After extensive consultations with all stakeholders, the department of public enterprises (DPE) is planning to approach the Cabinet next month with proposals to grant greater functional autonomy to public enterprises.

"The Cabinet note on granting greater functional autonomy to PSEs on the basis of proposals of ad-hoc group of experts on empowerment of central public sector enterprises is being finalised. It will be placed before the Cabinet next month," sources said.

While the group headed by Arjun Sengupta, now a Rajya Sabha member, had made some radical suggestions on granting more functional autonomy to PSEs, not all are expected to be accepted in totality.

The government had earlier substantially enhanced the financial powers of the PSUs on the basis of the recommendations of the group in the middle of last year.

"All stakeholders have expressed different views on the various aspects of autonomy. The DPE has its own views. All these will be communicated to the Cabinet for decision," the sources added.

While the PSEs may get greater autonomy in their relationship with the administrative ministries and some reprieve on vigilance matters, institutions like the Comptroller and Auditor General of India have justified their role vis-a-vis the PSEs.

The ad-hoc group had recommended that test and supplementary audit of state-owned companies should be done in exceptional circumstances.

The CAG has, however, spoken against such a proposal. It has taken a view that since large amounts of public money are involved in the PSEs, a government audit is essential.

Moreover, it serves altogether different purpose than the audit under the Companies Act, the CAG has maintained.

On the question of supplementary audit, the DPE is understood to have gone with the stand of the CAG.

The government is likely to accept the recommendations of the ad-hoc group to simplify the process of vigilance clearance in case of PSE officials aspiring for board appointments.

The proposal that employees of PSEs should be treated at par with civil servants for launching criminal prosecution may also be accepted with some modifications.

The recommendation of the group for setting up a screening committee for Parliament questions on PSEs is likely to be rejected.