Public Sector Companies are created for better output but why keep inferior terms of service there?

Daya Sagar

One would ask why did the J&K SAC in 2019 while according sanction to the unbundling of the Jammu and Kashmir Power Development Department (JKPDD), J&K State Power Development Corporation limited (JKSPDCL) & J&K State Power Trading Company Limited (JKSPTCL) (to be renamed as J&K State Power Trading Corporation Limited) and The creation of Jammu Power Distribution Corporation Limited also decided that the staff of different wings of the JKPDD shall be deputed to the respective corporations and ‘service’ interest of serving employees of JKPDD sent / transferred to JKSPDCL and JKSPTCL shall be protected and not varied to their disadvantage in terms of service benefits? The reason has been the ‘sickness’ that has prevailed all along in the J&K State owned PSEs.
The overall policy for operation of Public sector companies / corporations / PSU is made by government and the Chief Executives / MDs all these years too have been posted on deputation from government who have almost nothing at stake or even if by promotion out of PSUs cadres that too have been with the liking of ‘Government’ where in even the Bureau of Public Sector Enterprises /Undertakings was/ is rarely involved without taking leads even from the policy of common cadres that was laid when the Rajan Committee report was accepted by the Government in 1980. Rajan Committee had in 1980 ( 22-04-1980 ) recommended to have common managerial cadres for PSU where as that never came into operation in actual practice , not only that Bureau of Public enterprises/ undertakings has remained a defunct body.
Not only that instead of employing some professional consultants and taking some reformate steps it was in March 2017 the then PDP-BJP J&K government appointed around 16 politicians as vice-Chairpersons of some already ailing PSEs/ PS Undertaking which were already starving of finances and suffering of poor management policies. One would still have appreciated appoint of the VCs burden had the government appointed some from professional / commercial sector so that they could contribute with their expertise for medicating the sickness of ailing public sector by even counselling the Board of Directors to dismantle the culture of appointing the Chief executives in ‘routine’ on deputation from the Government who are to have nothing at stake as regards their service career as well as socio-economic security. J&K government in February 2018 informed the J&K Legislative Assembly that J&K Cements limited was leading the table of loss making PSUs with a loss of Rs 46.74 crore – Rs 31.73 crore in 2016-17 and Rs 15.01 crore in 2017-18; two PSUs – JK Minerals limited and JK Projects Construction Corporation – joined six other profit making PSUs in 2017-18 after registering losses in the previous financial year; even The JK State Financial Corporation, slipped into the loss of 1.02 crore in 2016-17 against a profit of Rs 45.73 lakhs in 2015-16. Other PSUs suffering losses included JK State Road Transport Corporation (SRTC) where it had suffered a loss of Rs 13.73 crore in 2015-16, the loss shot up to 31.44 crores in 2016-17. One would still ask how the losses have been worked out when accounts have been in arrears? It was on 06-03-2019 that J&K Government constituted a high level Committee headed by Administrative Secretary Finance Department as its Chairman while Administrative Secretary Transport Department, Administrative Secretary Planning, Development Department and Managing Director, J&K State Road Transport Corporation as its Members to examine alternate models/options for the revival of JKSRTC to make it economically viable and self reliant where the Committee had to make a report in 3 months but I doubt there had been any meaningful report. No doubt it was also reported on 04072019 that in a meeting of SAC with Governor S P Malik in view of the grave financial status of PSUs had taken serious note and a circular was also issued by Finance Department J&K Government under NO: 17-F of 2019 date 05-09-2019 ( review of working of PSUs/ Autonomous Bodies / Societies) for something like enforcement of financial discipline and remodeling the operations for viable sustenance. But going by the position even in 2023 as regards the style and levels of management of J&K PSEs it could be said that “that” was only a ‘Decision’.
The reference terms mentioned for immediate compliance in a 19-01-2019 circular of J&K Finance department well spoke of the continuing miserable state of functioning of JK PSEs. It was on 29-01-2020 that in reference to Review of Annual Accounts of Public Sector Undertakings/ Autonomous Bodies/Societies Circular 01-FD/BPE of 2020 Dated: 29 -01-2020 (Review of Annual Accounts of Public Sector Undertakings/ Autonomous Bodies/Societies) was issued by J&K Finance department inviting attention of all Administrative Secretaries and Heads of Public Sector Undertakings/ Autonomous Bodies/ Societies to Government Order No. 416-F of 2019 Dated 23.08.2019 and Circular No. 17-F of 2019 dated 05-09-2019 whereby instructions had been issued for completion of all the pending / due statements of accounts and Annual Audits upto 31.03.2019 (which was immediately needed for the information of Advisory Committee for the purpose of apportionment of assets and liabilities between UT of J&K and UT of Ladakh) .The circular said serious note had been also taken by Honb’le LG too (a) All the PSUs/ Autonomous Bodies/ Societies shall immediately complete their pending accounts, in any case before end of February, 2020. (b) Wherever Boards have not been constituted, these may be constituted immediately ( c) The list of Directors on the BoD needs to be updated with Registrar of Companies.(d) The first meeting of the re-constituted Boards of these PSUs may be held before 15.02.2020. Hope the schedule might have been kept.
It was on 08-09-2021 ( Government Order No:877-JK(GAD) of 2021 Dated:08.09.2021 ) that J&K Government had constituted a high level committee for proposing roadmap with regards to merging J&K SIDCO and J&K SICOP into a new company (committee comprising of Financial Commissioner /Additional Chief Secretary Finance Department; Principal Secretary, Housing & Urban Development Department; Principal Secretary, Industries & Commerce Department and Secretary, Department of Law, Justice & Parliamentary Affairs ) keeping in view the J&K Development Act, 1970 and any amendments they may be needed in the Act too. That was a good initiative but it would have been better had there been some professional consultant from the industrial / commercial field as well. It has also been reported that the new company will have executives of the level of Chief Managing Director and Managing Directors. Inspite of so bad experience as regards management of PSEs in J&K even this high power committee also had only Government Officers like earlier high power committees { Rajan Committee Report 22-04-1980, Madhav Godbole Committee ( economic reforms ) Report 1998, Core Group Report ( 2004, Khursheed Ganai as Chairman) and High Power B.R KUNDAL Committee Report 2006 that was accepted vide Government Order No.218-F of 2007. Dated:-16-7-2OO7 for GHS / VRS for implementation }.
Among other things the issue that also need immediate and careful investigation is practice of appointment of some people in managerial cadre in a PSU and then taking him/her to some government department with intentions to fix him/her in government through back channels and using him/her for decades not for benefit of cadre starved PSE or getting appointing someone from market on a senior post like Finance Director / Financial Advisor/ Chief Accounts Officer pleading that those on deputation from Govt. Finance Deptt. had failed to do commercial accounting resulting in bad financial management as well pending company accounts but even after that balance sheets / accounts remained in arrears for decades. And above no person at the managerial level should be taken on deputation from government in a Public Sector and particularly the Managing Director & Finance Head should on PSU cadres only and the BODs must have atleast 40% members from the private sector.
(The author is a senior journalist and analyst of J&K Affairs [email protected]).