Recommendations to revitalise and restructure the people sector enterprises

January 13, 2016 | By | Add a Comment

Here are few recommendations to revitalised restructure the people sector enterprises, in the 4th International Conference on Kerala Studies in Trivandrum.

1)Make a clear distinction between public sector companies involved in delivering essential services like water, electricity and public transport and other state-owned enterprises designed to operate in the marketplace competing with other private actors. We also need to make a distinction between sectors with government monopoly (e.g. Kerala state beverages corporation) and those enterprises that will face still competition from private actors in India and elsewhere.

Such a clear distinction is essential for clear strategy development to revitalise each of those enterprises to add value and make a profit. As of now, the loss is calculated by mixing all these into one basket giving a very distorted picture to various stakeholders and the public.

2) It is imported to reconceptualise these as peoples_s enterprises rather than government-owned enterprises as the predominant image is that bureaucratic establishments in partnership with political elites attached with dominant political party formations. It is due to this approach that almost all such enterprises are administered (rather than managed) by typical status quoits bureaucrats rather than professionally trained managerial leaders with domain knowledge and marketing capability. Hence, there has to be a moratorium to point standard IAS/IPS officers without any domain knowledge or management aptitude or to accommodate the cronies of respective ministers or the party. It is this administrative, accommodative and ad-hoc approach that derailed most of these enterprises. This also resulted in corruption at all levels and a work culture devoid of any sense of accountability and transparency. Hence there is a need for a paradigm shift at political, policy, governance, management and operational level to revitalise, sustain and make them profitable enterprises with a collective sense of ownership.

3) A strategic analysis of each of the enterprises needs to be done and then decide the principles of capacity, market viability and adaptation to changing the context of competition and market dynamics.

4) initiate a multi-stakeholder discussion at each of the enterprises by taking all the employees and trade unions into confidence. Such multi-stakeholder talks should also involve management experts, governance experts, and even people with direct domain knowledge of the specific product and the niche market for such a product. Each of the companies can develop a viable revitalisation plan considering all pros and cons.

5) Create a special vehicle to attract new funding through new investments from NRI workers and small entrepreneurs from the GCC and other countries.

5) Public sector for essential services may be restructured to make then optimally efficient and economically viable, rather profit motive alone. However, other enterprises designed to compete in the marketplace must have profit generation motive and they must be fully managed by professionally competent managers.

7) It is essential to develop a broader social and political consensus about the political economy rationale of revitalising and sustaining such enterprises and boost people_s confidence as the entire media discourse is that government should sell off all these to private actors, in consonance with neo-liberal sort of constructed common sense. It is also essential to take the trade unions into confidence about the need to bring a long-term perspective rather than a very narrow immediate interest perspective.

8) I think it is essential to take a principled as well as pragmatic view on each of the public sector enterprises. The critical challenge is that all of them are bogged down in operational baggages and cumulative mismanagement and a non-accountable work culture. This functional preoccupation and the cumulative politicisation of all aspects ( from appointment to purchase to management to governance to marketing ) have a debilitating effect and also play significant hindrance to creative and strategic approach to the SOEs.

Without a broader political, policy and social consensus, there is a danger that there will be a broad discourse (driven by neoliberal agenda) to sell them off.

So we need a specific detailed strategic approach for each of the companies, a broader policy and governance approach and consistent advocacy at various levels.

Date: 13.01.2016

John Samuel

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