Prime Minister of India - Dr. Manmohan Singh

PM's address at the MoU Excellence Awards and Scope Awards Ceremony

"It is a matter of great joy for me to be amidst you today in this function for the presentation of the MoU Excellence Awards and SCOPE Awards for the year 2008-09. Let me begin by congratulating the award winning organizations and their Chief Executives. In many ways you are role models and I hope that your performance will inspire others to strive and achieve higher goals of human endeavour.

Our public sector enterprises have been doing reasonably well in an increasingly competitive and uncertain environment. It is in no small measure due to the robustness and resilience of our public sector enterprises, and in particular, our public sector banks, that we did better than most other countries in weathering the global economic crisis which suddenly erupted in September 2008. More and more public sector enterprises are now entering the capital markets and receiving encouraging response from investors, including retail investors. The recent public issues of Coal India Limited and Manganese Ore India Limited have been hugely successful. This indicates the vitality and the inherent strength of our public sector enterprise and it also shows that our public sector is now ready to face the test of market scrutiny. We have reasons to be confident about the ability of India's public sector to face the challenges that lie ahead for our country, both domestically and globally. Enterprises which are facing difficulties, such as Air India and BSNL, are receiving the due attention of the Government,

As I have stated earlier on a number of occasions, our Government is committed to a strong public sector in many areas of our economy. In some sectors there is also a need for our public sector enterprises to explore global opportunities. In particular, we need to step up our search for raw material assets. The Government is working on a policy to support our public sector enterprises in this effort.

We are also conscious of the need to ensure the highest standards of corporate accountability in our public sector. We are one of the very few countries in the world that have implemented a mandatory Code of Corporate Governance for their public sector enterprises. Further, we have encouraged our Central public sector enterprises to adopt a robust and transparent Performance Management System. Incentivised and revised salaries for executives and for workmen, along with innovative measures such as Performance Related Pay will I believe result in sound practices for better corporate governance, which is of critical importance in today's increasing competitive environment.

Our public sector enterprises sometimes feel constrained by the need to follow utmost transparent processes, which may at times impede speedy decision making. This is probably inevitable consequence of the fact that these enterprises have been set up with taxpayer's money. However, we have been attempting to give increasing autonomy and flexibility to our public sector enterprises. In this context, we have also created a new category of 'Maharatna'. Four public sector enterprises have achieved this status & hence have been given more powers to take on global competition aggressively. These four 'Maharatna' companies, Indian Oil Corporation Ltd., National Thermal Power Corporation Ltd., Oil & Natural Gas Corporation Ltd., and the Steel Authority of India Ltd., are already significant global players and I hope they will use their enhanced powers wisely and play an even bigger global role in the time to come.

As you are all aware, our public sector units also have a societal obligation. They often operate in areas where the private sector is reluctant to step in. It is my firm hope that this particular expectation will not be lost sight of. I am happy that as part of this role many companies have been contributing a part of their profit earned for various projects meant for purposes of social development. I have been told that Department of Public Enterprises has recently issued comprehensive guidelines on Corporate Social Responsibility for Central public sector enterprises.

I must also mention the good work being done by the Board for Reconstruction of Public Sector Enterprises presided over by my friend Dr. Nitish Sengupta. The Board has examined 67 cases of sick and loss making public sector enterprises and approved revival plans for 59 companies. Today 20 out of these 39 revived cases are showing profits and 11 have made profits for the last 3 years. The mantra of success of these 11 companies has been empowerment and enablement rather than mere financial assistance. More than 1.7 lakh employees have benefitted from these efforts at reconstruction. We must ensure that these improvements are sustained in the long run, and these companies do not need to come back to the government for fresh revival packages.

We need to improve productivity both in our public and private sector. For our public sector enterprises to survive in increasingly competitive, they must make use of new technology and pay attention to improving corporate governance. Indeed by doing so they will contribute to strengthening our economy and our country. I expect the public sector to be in the forefront of such efforts including the quest for innovation, adventure and enterprise. I expect it not to be satisfied with the status quo and to have the ability and the vision and the courage to adapt itself quickly to the winds of change which are blowing all over the world.

The quality of its human resource is critical asset to the success of any organization. We must ensure that a vibrant private sector does not deprive our PSEs of our best talent. The Government has put in place an improved system of remuneration. But, the overall working environment in the company has now become an equally important factor for attracting and retaining employees. We must ensure proper succession planning in our companies. We must therefore ensure that we are able to recruit bright young men and women into public sector jobs, and must have the ability to retain them there. I would urge the ministries and the public sector leadership to give serious attention to human resource development issues at all levels.

Let me conclude by once again complimenting the award winning organizations. I hope you will be path finders and that your example will be there for others to follow. I urge all of you to work earnestly, steadfastly and with devotion to strengthen our public sector. I wish all of you the very best."