Show them the door

If ever it had a rationale, it was that PSUs were seen virtually as government departments, with the profit motive scarcely impinging on anybody’s consciousness. When control was more important than business success, administrators as managing directors were a little less ridiculous than they are now. If bowing to their political masters was more important than turning a profit, PSUs were well served by bureaucrats at the helm. There was also the time-honoured colonial tradition of ubiquitous and omnipotent civil servants. But things have changed, though rather less than they should have. Getting rid of babudom’s stranglehold is an imperative justified by two different things hugely important for economic success. The first relates directly to PSUs, the second to the civil service. Both, as everyone knows, are factors of overriding importance.

The so-called disinvestment programme no one has bothered to pay lip-service to privatisation even in nomenclature is and has been from inception a resounding failure. It is fully acknowledged that, leave alone privatisation, even for partial disinvestment to succeed, drastic PSU restructuring is a must. This has dozens of elements, primary among them the need to streamline bulging employment, a nod in the direction of professionalism leading to profits, learning to do without the insulin of subsidies, and so on. Arguably the most important, though, is the need for professional management which, by definition, means that the IAS must be out. The reason is not just that babus are not equipped with the skills professional managers bring to the job. They are not, and that is a crippling disadvantage for companies seeking to turn themselves around. But even more, by the very nature of their profession and training they serve to perpetuate the political stranglehold on PSUs. Finally, of course, they have no lasting stake in the PSUs they happen to head for a brief while in their career. The companies’ bad performance brings no punishment in its wake, and they will go on to their next assignment, no doubt to exert there the same power. The implications of the PSU connection are no less important for the civil service itself. If the idea is to weaken the bureaucracy’s grip, bestowing PSUs as fiefs upon its members is a strange way to try. Especially in an era when business has probably acquired greater respectability than government, allowing civil servants to straddle the corridors of both economic and political power is an abuse of the idea of a division of power. It harms the companies and entrenches a service which already stifles with its reach.