From a high-profile civil aviation ministry to a relatively low-key Ministry of Heavy Industries and Public Enterprises, Praful Patel is currently busy in launching a multi-pronged strategy for making public sector enterprises globally competitive. In an interview with Sanjay Jog, Patel says he is aware of the kind of difficulties and bureaucratic processes the companies face. Edited excerpts:
What are your priorities as the minister of heavy industries and public enterprises?
There is a huge amount of work which includes bringing in reforms and giving necessary directions and support to public sector enterprises (PSEs). The objective is to make them globally competitive, and for that they need to be properly guided and supported, so that they can take on competition, both domestically and globally.
In my view, PSEs need to be nimble on their feet and for that the department will give a right focus. I am aware of the kind of difficulties and bureaucratic processes the companies face.
I want to bring in necessary changes in the appointment of independent directors. What is the level of quality? My ministry will monitor these appointments. Those who will be appointed as independent directors must contribute to the company’s growth and they should not just adorn the boardrooms. They should have necessary background and commitment to serve on the boards.
Moreover, we will also want to see that there should be a proper succession planning for heads of PSEs. On many occasions, the search for a successor begins on the day when the incumbent retires. More often the seniormost official is given a charge or a joint secretary is appointed. I am of the view that this should be stopped, as we should have a proper succession planning well in advance, so that the company has a continuity, direction in its operations and it does not get let down.
What are your initiatives to make PSEs competitive?
The ‘maharatna’ companies will be given more power and operational flexibility. Similarly, for other companies, the ministry wants to streamline decision making processes so that for every now and then they need not come to the ministry. We can provide them a structure, so that they can operate in a transparent manner. We will also seek guidance from external expertise.
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What are your views on disinvestment, especially on the fate of perennially sick units?
We will have to look at companies doing well and also those can be turned around. However, for those terminally and perennially sick, the government has to take a decision. Some disinvestment has been proposed in the Budget and the government wishes to realise Rs 40,000 crore, keeping the 51 per cent PSU benchmark. That is for the companies doing well and those can be listed and those about to be listed. Further, there are some companies under the Board for Reconstruction of Public Sector Enterprises which are being turned around. I reiterate, for those companies which are perennially sick, the government has to take a fundamental call. Besides, there are some companies which are dealing with a variety of businesses not core anymore. The government will have to take a necessary decision for deciding fate of such companies, too.
BHEL, the power equipment manufacturer, is facing a strong challenge from the private sector. How will it be positioned in the years to come?
Bharat Heavy Electricals (BHEL) is going to be in a position to execute projects worth Rs 20,000 crore annually from 2012. This apart, L&T-Mitsubishi, JSW-Toshiba, Bharat Forge will be engaged in power equipment production and supply. However, BHEL is geared up to meet the challenges of the future. BHEL is ready for nuclear and solar equipment manufacturing.
How is the ministry engaged in launching the mission for electric and hybrid vehicles in India?
The automobile sector is poised for huge growth and India will be the third-largest market. We will have 10 million units by 2020 from the current 2.5 million units. It will need huge investments, both in the core and ancillary sectors.
We are emphasising on R&D. There is a national mission for electric vehicle mobility and hybrid cars. I am heading that mission. We have to undertake an ambitious programme especially due to environment standards and also because of India’s heavy reliance on import of petroleum products. Our objective is to bring about electric and hybrid vehicles in the next five years which should be economically viable, sustainable, environmentally and economically viable. They should be user-friendly. We will unfold the mission, conduct workshops and get inputs from the best of people.