AIMA 3rd PSU Summit-Veerappa Moily Chief Guest

'Give absolute autonomy to the PSUs' says Veerappa Moily

'PSUs should have enough funds to invest so that they can generate wealth which the government can redistribute'

'India's import-dependence for energy is rising because of resistance to increase in fuel prices'

20 December 2013, New Delhi: "I'm in favour of giving absolute autonomy to PSUs…I don't want to have the CEOs of PSUs coming to ministry for small things," said Dr Veerappa Moily, Minister for Petroleum & Natural Gas. He was speaking at the 3rd PSU Summit organized by All India Management Association (AIMA).
 
"I'm a reformer...If the country has to grow at great speed then we should have reforms at every step," said the minister.
 
On the subject of heavy subsidy burden on oil PSUs, Dr Moily said that the PSUs should have enough funds for investment so that the PSUs can generate wealth that the government can redistribute. "Profit motive alone will not take the country forward...but unless you allow the PSUs to generate wealth, investment will not happen," he said.
 
The minister attributed India's increasing dependence on imported energy to the public and political resistance to price increases of fuel. He said that lack of investment surplus with energy PSUs was hampering investment in technology and research for greater local production. He argued that it was critical to balance imports with domestic production and announced that his ministry was working on a plan to make India energy self-sufficient by 2030.
 
ONGC has been given the task of accessing global energy resources before the Chinese can get to those, the minister said. He predicted that the revenues of ONGC's overseas assets will exceed the domestic revenues of ONGC within 3-4 years. "Unshackle the PSUs, allow them to function, given them targets and they will find ways to deliver," he remarked.
 
Summit Chairman, Mr Sudhir Vasudeva, Chairman & Managing Director, ONGC , said that the PSUs faced significant challenges in becoming competitive and they needed intervention at the highest level of policy making. "We need greater financial autonomy for the Navratna and Maharatna PSUs," he said, adding that the present tendering system that favours the lowest bidder will not do for R&D.
 
Commenting on talent acquisition and retention by the PSUs, Mr Vasudeva said that under the present policies and procedures, it was not possible to recruit and keep the best.
 
Mr O P Rawat, Secretary, Department of Public Enterprises, emphasized that the PSUs had earned the right to autonomy by performing exceedingly well during the ongoing economic slowdown. He mentioned that between 2008 and 2012, the revenues of central PSUs had grown at an average rate of 20 per cent and their profits had grown at an average rate of 10%. "The PSUs deserve all autonomy and the DPSE is working in that direction," he said. However, he informed that after rebuffing the impact of the global financial crisis for five years, the PSUs were now beginning to show it effects. The revenues and profits of the CPSUs have been stagnant this fiscal year, he informed. "We need to find out why there was a phase lag of five years for the crisis to affect the PSUs and we need to figure out how PSUs can cope even better," he said.
 
Mr U D Choubey, Director General, SCOPE, demanded that the private corporate sector also be brought under the jurisdiction of CAGI and RTI, as it also dealt in public money. "Let there be a level playing field for the public sector," he said.
 
Mr Manoranjan Kumar, Advisor, Department of Public Enterprises, advised the PSUs that before they considered going global, they needed to become global at home by achieving globally competitive practices and products at home. "You cannot be globally successful unless you're locally strong," he said.
 
The Summit was also addressed by many other eminent public sector officials, including Mr BB Pattanaik, Managing Director, Central Warehousing Corporation, Mr HS Pati, Director, Personnel, SAIL and Ms Veena Swarup, Director, HR, Engineers India Ltd.
 
KPMG was the knowledge partner for the Summit.
 
About All India Management Association (AIMA)
The All India Management Association (AIMA) is the national apex body of the management profession in India. AIMA is a non-lobbying organisation, working closely with Industry, Government, Academia and students to further the cause of the management profession in India. AIMA makes a constructive contribution to management learning and practice in the country by offering various services in the areas of testing, distance education, research, publications and management development programmes.
 
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