International Workshop on ‘Performance Evaluation and Management of State Owned Enterprises

A two day long  international workshop on ‘Performance Evaluation and Management of State Owned Enterprises’ began here in New Delhi with a remark of  hope of finding possibilities of  future collaborations and expansion of  operations in varied areas by the Union Minister of Heavy Industries and Public Enterprises Shri Anant Geete. He was accompanied by the MoS Heavy Industries and Public Enterprises Shri G.M Siddeshwara and Shri Kapil Dev Tripathi, Secretary Department of Public Enterprises, Shri Satish B. Agnihotri, Secretary, Performance Management Division, Cabinet Secretariat, Govt. of India  and Shri Arvind Subramanian,  noted economist and the currently, Chief Economic Adviser to the Government of India on the occasion.

The Minister appreciated the initiative taken to bring together policy makers, academicians, SOE officers and experts in the field of management of SOEs from all over the world with the objective of sharing best practices and experiences in this area.  Welcoming the delegates he said It is heartening to note the overwhelming participation from both developed and developing countries and in my opinion this is a reflection of the continued relevance and importance of SOEs in the present liberalized economic environment.

He said , SOEs referred to as Central Public Sector Enterprises (CPSEs) in India have been  at the forefront of our country’s developmental efforts since independence. They have played a pivotal role in the balanced social, economic and industrial development of the country. The strong presence of CPSEs in strategic areas such as petroleum, mining, power generation and transmission, shipping etc have been the building blocks of our economy. With the opening up of our economy, CPSEs have been exposed to both national and international competitive forces and though they have risen to the challenge, there is scope for higher levels of performance.

The Boards of CPSEs have been provided with a large measure of flexibility and autonomy to deal with day to day management issues. In addition, we have identified select profit making CPSEs as Maharatna, Navratna or Miniratna and empowered their Boards with operational and financial powers in the areas of capital expenditure, investment in joint ventures/subsidiaries, human resources management, entering into technology joint ventures or strategic alliances, etc, Shri Geete added. He suggested the country representatives and CPSE officials to  take this opportunity to discuss possibilities of leveraging their respective strengths to collaborate and expand their operations.

The minister said  all organizations need to constantly reflect on their performance standards and work on strategies to constantly improve such standards and the organization of this workshop is outcome of such realization. While discussing the issue of performance of State Owned Enterprises, it is generally agreed that metrics of assessing performance cannot be completely similar to that of the private sectorSince, the challenges of management of SOEs remain more or less similar across countries; it would be very useful to learn about initiatives taken by other countries as we share our experiences in this regard, the minister noted.

Shri Geete expected of stimulating discussions on various issues relating to management and evaluation of performance of SOEs during the course of conference with suitable conclusions.  He said  an institutional network should be established which would allow cross learning on a continuous basis. Hoping that senior officers and Chief Executives and Directors of our CPSEs getting  benefitted  from the discussions in the workshop as well as interactions with their international peers and such interaction would lead to innovative policy interventions. He welcomed participating delegates coming from 11 countries and thanked the DPE as well as the United Nations Development Programme (UNDP) and the World bank in organising the 1^st ever such workshop in India.

Minister of State in the M/o Heavy Industries & Public Enterprises Shri G.M Siddeshwara said India with its mixed economic system had accorded its State owned enterprises, known here as Central Public Sector Enterprises (CPSEs), a crucial role in facilitating balanced social, economic and regional development of the country. In terms of governance structure, our CPSEs come under the administrative jurisdiction of line Ministries and agencies such as Department of Public Enterprises, Ministry of Finance, Department of Personnel & Training, etc. coordinate matters concerning all CPSEs.

Shri Siddeshwara said the strong performance of our CPSEs can be gauged from the figures which speak for themselves. He said we started from 5 CPSEs in 1951 and there are  more 270 CPSEs operating in almost all critical sectors of the economy. Our CPSEs have aggregate investment of around ninety three thousand million US dollarsand a turnover of more than sixty thousand million US dollars for the year 2012-13. The total net profit of 228 operating CPSEs was around twelve thousand million US dollars and our CPSEs contributed more than thirteen thousand million US dollars to the Central Exchequer by way of excise duty, customs duty, corporate tax, dividend, etc. during the year 2012-13.

The Minister said , Government is  aware of the dynamic nature of the business environment of CPSEs and has taken appropriate policy initiatives. The system of Memorandum of Understanding has facilitated the process of indication of the Government’s expectations to the management of CPSEs in an objective manner. In tune with the current business scenario, while profitability has been a major consideration for commercial CPSEs, parameters such as Research & Development, Corporate Governance, Exports, Capital Expenditure, Human Resources Development, Project Implementation, etc. have been given due importance in the MOUs of all CPSEs so that management of CPSEs does not lose sight of these important aspects.

He said Government of India remains fully committed to a strong and vibrant public sector so that it can supplement efforts of the Government to fulfil aspirations of the common people and to ensure development of all parts of the country with every section of the society getting its rightful benefits. The Government will continue to take appropriate and required policy measures to further improve the performance of CPSEs in the coming years. 

Shri Satish B. Agnihotri, Secretary, Performance Management Division, Cabinet Secretariat, Govt. of India in his presentation outlined the basics required to gauze the working and performance of State Owned Enterprises.  He deliberated on the challenges ahead and insisted on continuous learning and sharing of experiences from counterparts. He also advocated for the inculcation of new technologies to better the performance of SoEs.

Shri Arvind Subramanian,  noted economist and the currently, Chief Economic Adviser to the Government of India, in his address referred to the changes occurred in the Indian economy during the past 15 months and hailed the upward trend of positive signs and its revival notes. He said with the change of regime conditions on economic front have also become favorable for India.  Mr. Subramanian emphasized on the enhanced investment by the public sector   towards the economic growth .