- The decision to nominate BJP workers as non-official directors makes a mockery of the party’s 1998 manifesto and the government’s own guidelines issued in 2015.
- In an interview, Modi repeated his favourite maxim, “minimum government, maximum governance.” He went on to state, “in a developing economy, state enterprises do have a role in some sectors. They have to be managed professionally and efficiently. We have given them operational freedom and brought in talent from the private sector as well to facilitate this.”
- Modi's decision that ONGC acquire 80% stake in debt trapped GSPC, by investing Rs.7,738 crore badly hurt its finances and its credibility. The decision is apparently imposed on the company by those whose primary objective was to bail out GSPC and obfuscate its shortcomings. A nominee director on the board of ONGC would have found it difficult to resist the extraneous pressure.
- A year after Modi’s interview with the WSJ, his government took the patently retrograde step of nominating BJP spokespersons and party workers as non-official directors of eleven odd CPSEs, many of which are ‘Maharatna’ and ‘Navaratna’ companies, which are expected to have a great deal of functional autonomy and be managed by professionals with experience.
- These include ONGC (Sambit Patra), Engineers India Ltd (Shazia Ilmi), Cotton Corporation of India Ltd (Rajika Kacheria), Hindustan Petroleum Corporation Ltd (Asifa Khan), Bharat Heavy Electricals Ltd (Surama Padhy), Bharat Petroleum Corporation Ltd (Tamilisai Sounderarajan), State Trading Corporation (Bharatsinh Prabhatsinh Parmar), Export Credit Guarantee Corporation Ltd (S. Malathi Rani), Andrew Yule & Company Ltd (Sipra Goon), National Handloom Development Corporation Ltd (Shikha Roy) and National Aluminium Company Ltd (K.G. Sinha).
- The credentials of each one of these persons are prima facie unimpeachable. But the question is to what extent will they be able to add value to the management of the CPSEs?
- Companies Act Section 166 requires the government to nominate any person who fulfills the criteria. While it no doubt provides a great deal of discretion, such a discretion cannot evidently be arbitrary and injudicious. The discretion so provided in the Companies Act enables the government to nominate persons who have sufficient domain knowledge relevant to the operations of a given CPSE.
- In its 1998 manifesto, the BJP, led by Atal Bihari Vajpayee, committed itself to managing the public sector “professionally”, “with least interference by government”.
- The department of public enterprises (DPE) advised all ministries that “non-official directors are to be drawn from the public men (sic), technocrats, management experts and consultants, and professional managers in industry and trade with a high degree of proven ability.” Further guidelines stipulate that persons nominated as non-official directors of CPSEs should be “professionals of repute having more than 15 years of relevant domain experience in fields relevant to the company’s area of operation”, “persons of eminence with proven track record from industry, business or agriculture or management.”
- The decision taken now by Modi government to nominate BJP workers as non-official directors clearly makes a mockery of the BJP’s own manifesto of 1998 and the guidelines issued more recently by the NDA government itself.
- Lord Denning, the greatest English judge of modern times, said, “there is nothing wrong with a director being nominated by a shareholder to represent his interests, so long as the director is left free to exercise his best judgment in the interests of the company which he serves. But if he is put upon terms that he is bound to act in the affairs of the company in accordance with the directions of his patron, it is beyond doubt unlawful.”
- It was reported that the present government had tried to appoint a BJP worker as a member of the National Human Rights Commission (NHRC) and it would have gone ahead with that move but for a PIL filed before the apex court.
- If Modi is earnest about reforming the CPSEs, he should walk the talk by distancing the government and his party from them. CPSEs needs professional management, competition and public accountability to perform its crucial role to play in nation building for decades to come and this kind of tinkering with their management is bound to hurt the economy.
Monday, 9 October 2017
PSU Boards being filled with BJP workers
Slogans such as “Minimum Government, Maximum Governance” and “Reform, Perform and Transform” are laudable, easy to articulate but difficult to translate into tangible action. Intentions underlying such slogans are more important than the spoken words. Intentions will mean nothing, unless they get translated into genuine action. As the gap between words and deeds widens, the credibility of sloganeering will get eroded. It is very clear that BJP's hidden agenda is neither well being of the nation nor its people but saffronisation of India.