PSU capital spending, funds leverage may boost India’s GDP by 2-3%: PESB chief Rajiv Kumar

Central public sector enterprises, which have a combined net worth of close to Rs 12 lakh crore, can boost India’s GDP by 2-3 per cent by leveraging funds and stepping up capital expenditure, Public Enterprises Selection Board (PESB) chairman Rajiv Kumar has said. He also exhorted public sector firms to “rise to the occasion” and play their part in building an ‘Aatamanirbhar Bharat’.

Besides, with an aim to address the talent shortage and promote transparency in board-level appointments of central public sector enterprises (CPSEs), the PESB chairman has suggested numerous measures including creating wider talent pool, allowing lateral entry for candidates and offering level-playing field.

For the last 5-6 years, CPSEs have been major investors in the economy as the private sector has been shying away from making fresh investment due to various reasons. Pinning hopes on public sector undertakings, Finance Minister Nirmala Sitharaman earlier this month asked large CPSEs to achieve by next month 50 per cent of their planned capital expenditure target for FY21 to support economic growth in the backdrop of challenges posed by COVID-19.

While mentioning the significant role of CPSEs in giving a push to the growth of the Indian economy, the finance minister encouraged the CPSEs to perform better to achieve targets and to ensure the capital outlay provided to them for the financial year 2020-21 is spent properly and within time.

In order to streamline the selection process in central PSUs, the PESB in its draft note on reforms also suggested avoiding repetitive interviews by clubbing the post schedule-wise or cognate group-wise. For instance, it said there should be standardised job description for identical posts of chairman/CMD/MD, Director (HR/Personnel), Director (Finance), Director (Marketing) and Director (Technical). The draft reforms suggest same qualification and experience for appointments for identical posts across CPSEs.

In view of clubbing of posts, encouraging applications from all sectors, it is proposed to increase the minimum number of slots for short-listed candidates from 12 to 16, it said. As a result, a wide talent pool gets to participate from all categories including internal and external in the selection process.

The draft note also suggested advertisements to be issued for vacancies falling during July 1 to June 30, one year prior to the date of vacancies. “Uniform mandatory qualification and experience will lead to more competition, transparency and bring about parity,” said a note on which the PESB has invited comments from the stakeholders by September 30, 2020.

PESB carries out board-level selection for about 250 CPSEs which play a very vital role in the growth of Indian economy. It is to be noted that CPSEs annual gross turnover is around Rs 25.5 lakh crore, while net worth is pegged at Rs 11.8 lakh crore. They contributed about Rs 3.68 lakh crore to government exchequer in FY19.

Balance sheet of PSUs permits additional leverage of around Rs 25 lakh crore on capex in the next four years. This is about one-fourth of the National Infrastructure Pipeline (NIP) of Rs 111 lakh crore. “As my last tweet from PESB. I exhort all CPSE execs to think strategic, synegize talent & resources amongst themselves. With Rs25.43 LCr as FY19 turnover, Rs11.8 LCr as Net worth, additional leveraging can fund CAPEX & add 2-3% to GDP. Pl rise to the occasion. Best wishes,” Kumar said in a tweet.

Rajiv Kumar, known for bold and systemic reforms, has brought in reforms in the PSU appointment process in his brief stint of just about four months as PESB chairman. He is all set to join as the Election Commissioner. In his previous avatar as the finance secretary, he was instrumental in bringing in fundamental changes in the banking sector and played a crucial role in merging 10 public sector banks into four.

He was also instrumental in brokering peace between the Centre and the Reserve Bank of India (RBI) that resulted in the smooth transfer of Rs 1.76 lakh crore of the central bank”s surplus to the exchequer last year. “Proposed reforms to revamp selection, simplify the processes, avoid repetitive interviews amongst the same pool, not allow to go slots vacant, encourage younger talent, allow movement of Execs at Board level amongst CPSEs of same schedule/cognate grp #PESBReforms,” Kumar’s another tweet said.

“The reforms designed to focus on integrity and comparative merit will ensure only best and brightest get the opportunity to helm the CPSEs. As the harbinger of growth and change enabling #AatmaNirbharBharat,” he said.
Observing that the participation of candidates from state PSEs and private sector is allowed up to June 9, 2021 only as per the Appointments Committee of the Cabinet, the draft suggested that the approval should be extended till further orders.

Continuation of participation of candidates from CPSEs and the private sector would provide a wider pool and wider choice and create a healthy competition, the draft added.

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