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Minister of Heavy Industries and Public Enterprises Praful Patel today pitched for fixed tenure of at least three years for CMDs of public sector units in order to give them a definite period to perform.
"We are proposing that over a period of time we must change the rules and we must also give public sector CMDs at least a fixed tenure of three years," Patel today said.
He was speaking at the Standing Conference of Public Enterprises (SCOPE) Meritorious Awards function here.
The Minister said if there is not a tenure of three years, "how will a PSU leader be able to give his best".
Currently, there is no fixed tenure for the Chairman and Managing Director of state-run companies.
The proposal to fix tenure of CMDs is a part of the recommendations made by a committee headed by former SAIL Chairman S K Roongta.
The panel has submitted its report to a Group of Ministers (GoM), headed by Finance Minister P Chidambaram, which is looking at the recommendations.
"The Roongta Committee report has been received and I can assure you that it is not going to be only a piece of paper, the GoM is looking very closely at the recommendations made by the committee," Patel said.
Emphasising the need to redefine the role of PSUs in a globalised era, Patel said, "MoU (Memorandum of Understanding) targets need to be tweaked around to make them more achievable. There are some issues which we have looked at holistically."
In order to make MoU targets more realistic, the DPE is in the process of modifying the MoU guidelines. The agreement is signed between a PSU and its administrative ministry which is facilitated by the DPE (Department of Public Enterprises).
To provide more autonomy and flexibility to CPSEs, Patel said: "We certainly acknowledge the challenges (faced by PSUs) and certainly we in our own way are trying to work hand-in-hand with PSUs and SCOPE to see how we can evolve a much more dynamic and flexible approach for PSUs."
As on March 31, 2012, there were 260 CPSUs (excluding seven insurance companies) with a total investment of over Rs 7 lakh crore. These companies employ 13.98 lakh people.
