(Online Course) Public Administration for IAS Mains Exams
Topic: Public Sector Undertakings: Problems of autonomy, Accountability and Control
Autonomy and accountability must co-exist being directly inter-related. Autonomy carried to an extreme would totally frustrate the principle of accountability while accountability also carried to and extreme would nullity is very concept. As Public undertakings are to be judged by their total results, they should have sufficient operational autonomy. The Government’s control should be restricted to issuing of policy directives, exercising of strategic control and making of necessary coordinating arrangements to fulfil its responsibility for effective implementation of its socio-economic goals. At present there is a growing tendency on the part of the Government to interfere in the day-to-day working of enterprise.
Autonomy is pre-requisite for the successful functioning of Public enterprises. This is all the more important in view of the persistent allegations of Government interference in the internal affairs of Public enterprises.
Each five-year plan has emphasized the need for autonomy of the Public Enterprises in regard to the management of their affairs. Of late, several measures have been initiated to respect their autonomy. Civil Servants are no longer appointed in public enterprises. Professionalism in public enterprises is being consciously promoted.
Last but not the least in importance is the recent policy of signing of MOU (Memorandum of Understanding) between the Public enterprises and the controlling Government Ministry. Such MOUs have been signed with a large number of Public Enterprises to enforce accountability.
India created a new category for its highly-efficient state-run firms, called Maharatnas to extend much greater autonomy to its managements and flexibility in areas like mergers, acquisitions and recruitment.
Some of the Special powers to Maharatna Companies Include:
(a) Make equity investment to establish joint Ventures and subsidiaries in
India or abroad.
(b) Execute merger in India or abroad subject to a ceiling of 15% of its net
worth up to an absolute ceiling of Rs. 5,000 crore ($ 1 Billion)
(c) Power to the board on recruitment.