Committee favours closure of many PSEs

JAMSHEDPUR: The advisory committee on constitution of public sector enterprises has recommended the closure or merger of majority of about half-a-dozen public sector enterprises (PSEs) set up by the Jharkhand government in little over two years time.
Coming down heavily on the government, the 15-member panel headed BJP MLC Saryu Roy has observed the government constituted these PSEs "in a very short span of time" and "without assigning any convincing logic." It submitted its report to the chief minister Babulal Marandi recently.
The report states even the secretaries of the respective departments "could not rationalise the constitution of the PSEs in the present forms." It points out the PSEs have been established "on the pattern of their predecessor organisations in Bihar, in the same Act, and with almost the same purpose."
The committee was set up to suggest the government a policy regarding the PSEs. It was also asked to look into the question of setting up new corporations and retaining those to be inherited from the erstwhile state of Bihar.
The committee has recommended the government to wind up/merge the newly constituted forest development, hill area development, hydro-electric development and police building construction corporation. The four corporations were set up, even before the panel to submit its report.
The committee, which has urged the government to adopt MoU policy and grant more autonomy to PSEs, has also asked the government to take "effective steps" to make the remaining corporations "efficient, purposeful and target oriented." Most of the newly constituted PSEs have not "fully started" their work.
The report reminds the Jharkhand regime of the experience of PSEs in Bihar, where "political factors" influenced the decision making process. The total accumulated loss of the PSEs in Bihar till March 2000 was Rs 3,000 crores. The number of employees rose from 85,651 in 1989-90 to 88,872 by March 2000, even as most of the corporations were defunct and not in the position to pay salaries. Class I officers constitute a meagre 0.5 per cent of total workforce. About 88.5 per cent of the employees belong to class III and IV category.
The panel has advised the government to tread cautiously in setting up boards and corporations. "The 11th Finance Commission had directed to pass on several development works to panchayats. The state government will mainly work in the core sector."
"There is no need to create a large number of PSEs with small and overlapping area of activity," the reports states, adding that the government should form a "mega corporation" to serve the objective of PSEs like industrial development commission, electronic, pharmaceutical and chemical, finance, credit and investment as well as industrial area development authorities.
While advising the government against setting up of a host PSEs like state textile, leather development and road transport, it has advocated for establishing a corporation to boost growth in IT and bio-technology sector. The committee has advocated for a separate board to tackle the problem of land reclamation, wasteland development and displacement.
The panel has suggested the state electricity board should be bifurcated into three separate corporate wings as directed by the Union government. The Tenughat Vidyut Nigam Limited should be merged with the power generation wing, while the hydro electric corporation should either be merged with generation wing or renewable energy agency. The report says five corporations for development of women, minority, SC, and ST should be brought under one umbrella.
The committee had favoured the merger of Mines Area Development Authority in Dhanbad and Hazaribag with the respective municipalities. Also, the handloom and handicraft corporation should be amalgamated with the khadi board that should be constituted on a priority basis.