GVR faults Govt PSU reform policy

The Commission has recommended total sale of two public sector units, part sale in another two and no sale two others in its sixth report. Electronics Trade and Technology Development Corporation (known as ET&T) and Rehabilitation Industries Corporation Limited (RIC) have been recommended for total sale while part sale has been suggested for Hindustan Vegetable Oil Limited (HVOC). It has recommended no sale in Hindustan Zinc and National Hydroelectric Power Corporation (NHPC).

“The Commission had repeatedly told the government through various reports — that decisions on crucial areas should be expedited particularly in areas like creating disinvestment fund, offer of shares in domestic market and revamped voluntary retirement scheme,” Ramakrishna said.

The Commission would like the Government to draw a definite time-table for time-bound action to eliminate further delay in implementation of its recommendations. Of the 43 PSUs referred to it (excluding the withdrawn seven), the Commission has given recommendations on 43. The rest nine will be covered in the next report due in February. For ET&T, the Commission said that it should discontinue its operations with immediate effect since the telecom sector is highly competitive and the company did not have much chance of survival. The unqualified employees should be offered pension-cum-insurance scheme while those with entrepreneurial aptitudes may handed over the franchises instead of VRS amount after suitable pre-qualifications.

For HVOC the Commission said that its operations in vanaspati and packaging of refined oils be discontinued while the breakfast foods division be hived off as a new company and sold through a competitive bidding process.In case of Hindustan Zinc, it has suggested that about 25 per cent of its equity be sold to a strategic partner who can add to its mining strengths. There is no point in converting a near public sector monopoly into a near private sector monopoly.

For the Hotel Corporation of India (HCI) it has recommended its properties at Delhi and Mumbai be sold off through transparent bidding process. HCI should also try to exit from its property in Srinagar. The recommendations have been made to Air India since HCI is its subsidiary.

For NHPC the commission has said that there be no disinvestment until the Government implements a comprehensive hydroelectric power policy which looks at issues such as tariff and rehabilitation. “In future, the Government can save significantly by adopting a VRS rather than perpetuate employment by providing jobs to oustees till retirement,” the report said. It also recommended that the Dehradun mines of PPCL should be sold, and its employees offered VRS. Since the Rehabilitation Industries Corporation Limited was unviable, the Commission recommended closure of operations with immediate effect.

Commission attacks ESOP scheme

NEW DELHI: Disinvestment Commission chairman G V Ramakrishna criticised the employee stock option scheme (ESOP) announced by the Industry Ministry recently. “This scheme is different from a typical stock option scheme. A scheme should offer stocks as an incentive to the employees, free of cost with a moratorium on resale. The stock should be the reward for good performance,” he said.

And as the value of the stock goes up, so will the wealth of the employee. But the government scheme says that the employee will have to pay for stocks in the company. “But an employee may want to buy the stock of some other company and not necessarily his own,” Ramakrishna said.