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Scope for public sector reform

Standing Conference of Public Enterprises (SCOPE) is an apex professional organisation representing the Centre’s public enterprises.

business Updated: Feb 21, 2010 22:53 IST
Gaurav Choudhury

Standing Conference of Public Enterprises (SCOPE) is an apex professional organisation representing the Centre’s public enterprises. It’s objective is to promote excellence in organisations where public investment is involved, to make them globally competitive. Arup Roy Choudhury, Chairman, SCOPE and chairman and managing director of National Building Construction Corporation spoke to HT. Excerpts:

What recommendations has SCOPE made to the finance minister for consideration in the budget 2010-11?

SCOPE had submitted a Memorandum on Economic Policy Issues for consideration of the finance minister in the Union Budget 2010-2011. Among the issues taken up are policies of listing of PSUs, use of disinvestment fund, making voluntary retirement scheme more attractive, level-playing field for the public sector vis-à-vis private sector, reforms in labour policies, and strengthening the legal framework for recovery of non-performing assets.

What are the suggestions specifically made that will benefit employees of PSUs?

One of the major legacies of the public sector is large work force. To improve their operational efficiencies almost all public sector companies are right sizing their staff strength and with this in view as well as to attract staff to opt out these companies have come out with voluntary retirement schemes (approved by government). At present any amount received in excess of Rs 5,00,000 is subject to tax under the above-mentioned provision. There is a strong case for enhancing the present limit of Rs 5,00,000 to at least Rs 10,00,000.

What is SCOPE’s stake on the divestment of public sector shares?

SCOPE has always been advocating public sector companies under it to register in the market. But, we have always been saying the shares of public sector companies should be put in the market at an appropriate time.

Do you have any suggestion for changes in the tax structure?

SCOPE has suggested that government should review different cess, which has been enforced from time to time. Also, it is necessary to reduce subsidies in some areas so as to make the economy more dynamic. The government could review the existing corporate taxes since deduction of corporate taxes has always resulted in increase of revenue.

You are heading a construction company that has forayed in real estate. What suggestions do you have for the budget?

Central government PSUs in construction sector are working as an extended arm of the central and state governments and strengthening engineering so that shortfalls in the Public Works Department of the government do not come in the way of developmental projects.