The government of India runs many businesses – almost nothing is justified, though.
Most PSU businesses are run so that the Central Government (bureaucrats) and the Ruling party (as of Sep 2013, it is the Congress). Now if you see how the Cent Gov spends money on holding seminars, workshops, etc on Corporate Governance it is really surprising and funny. The Committees on Corporate Governance that they create from time to time is also a joke.
Narayanamoorthy, Kumar Birla, ….have all been part of committees – let the people working for their companies tell you how much of Corporate Governance exists.
I am still to see a company with real and complete commitment to the shareholders. Once upon a time the MNCs were run like that.
The PSU management does things which are unbelievable. Lets look at some of the examples. If the Prime Minister decides that there should be some austerity measure, and asks the Oil Ministry to reduce, let us say 100 people from its rolls, what does it do?
It asks Ongc, the oil marketing companies, etc. to take these people on its rolls – and post them to the Oil Ministry. Forget the petrol, diesel and gas subsidies, just shutting down the oil ministry will make the psus profitable!
The less said about the management and governance of Air India, the better of course.
Coal India is unable to collect money from NTPC because NTPC is not allowed to collect from the state governments! Coal India is forced to sell coal at a particular price and NTPC is forced to sell power at a fixed price.
The PSU bank directorship and auditors appointment must be seen to be believed. The words ‘independent’ is completely ignored, and is just on paper. Despite the fact that the government has so many banks it allowed Idbi to convert itself into a bank, and now they are mulling giving IFCI permission to become a bank. These 2 institutions have created more NPAs than what the banking sector could have done in a comparable period.
Most businessmen know that repaying bank loas is far more difficult than to take a Minister and a few bureaucrats on a junk trip…
Corporate Governance? My foot.
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