Minister for Heavy Industries and Public enterprises, Praful Patel, said that a Group of Ministers (GoM) setup to deliberate on public sector reforms has limited the minimum tenure for PSU cheifs. GoM considered the recommendations of the panel led by former chairman SK Roongta and decided to fix the tenure for heads of all the State run firms to be 3 years.
"Based on these recommendations and the deliberations of the GoM, we will move (proposals) to the Cabinet and come out with a fresh set of guidelines that will help CPSEs function in a much more competitive and transparent environment," Patel said.
After two rounds of deliberations, the GoM has also recommended the following:
- A strong set of independent directors are to be on the board of PSUs
- The age limit for independent directors to be raised to 70 years, instead of 65 years.
- Extend service of officers at the level of deputy general manager (DGM) and above by two years but, however, it may be limited to a maximum of 3% of total positions available in respective grades.
Currently, all chairmen of public sector enterprises retire on reaching the superannuation age of 60, which means some would have only a very limited time on the board to shape policies.
"Currently, anyone in the age group of 58-60 is disqualified for the post of CMD. This is demoralising for the highest functional directors who probably are senior to the new CMD. Therefore, it creates a kind of anomaly in the functioning," said Patel.
On share buyback plans of CPSEs, Patel said that most CPSEs are aggressively pursuing their expansion or diversification plan.
The finance ministry and the PMO are pushing PSUs to achieve their capex plans or give their surpluses to the government.
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