A Group of Ministers (GoM) has relaxed the age limit for PSU executives to apply for the top post, allowing even those who are left with even one day of service to apply.
The GoM on public sector reforms, headed by finance minister P Chidambaram, has approved the proposal for a minimum tenure of three years for chairmen of state-owned firms, irrespective of their superannuation age.
"As part of this proposal, the inter-ministerial group also accepted the recommendation which will allow Central Public Sector Enterprise (CPSE) executives who have crossed 58 years of age to qualify for the top position in the company," an official said.
Currently, an internal applicant should have at least two years of service left for him or her to be eligible for applying for the top job. This meant anyone in the age group of 58 to 60 years is disqualified for the post of CMD.
Also, all directors as well as chairmen of public sector enterprises compulsorily retire on reaching the superannuation age of 60 years. This meant that some would have only a very limited time on the board to shape policies.
"As a result of this, there is a demoralisation of the highest functional directors who probably are senior to the new CMD. Therefore, it does create a kind of anomaly in the functioning," minister of heavy industries and public enterprises Praful Patel has said.
The proposal was suggested by a government-appointed panel headed by former SAIL chairman SK Roongta.
However, the proposal will be sent to the Cabinet for its consideration.
Besides, the GoM considered other suggestions such as providing greater autonomy to CPSE boards for selection of joint venture partners and acquisition of companies.
As on March 31, 2012, there were 260 CPSEs (excluding seven insurance companies) with a total investment of over Rs 7 lakh crore. These companies employ 13.98 lakh people.