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Govt rewards loyalists, appoints them in loss-making defunct undertakings
On a spree to accommodate its loyalists, the Aam Aadmi Party (AAP) government in Punjab appointed some of them as chairmen of public sector enterprises that have been either incurring losses or are virtually non-functional.
On a spree to accommodate its loyalists, the Aam Aadmi Party (AAP) government in Punjab appointed some of them as chairmen of public sector enterprises that have been either incurring losses or are virtually non-functional.
The state government named AAP leaders Jasvir Kudni, Pradeep Chhabra, and Neel Garg, as chairpersons of the Punjab State Industrial Development Corporation (PSIDC), Punjab Large Industry Development Board, and Punjab Medium Industry Development Board, respectively, about a month ago. Their appointments to the three public sector enterprises under the department of industries and commerce were announced by chief minister Bhagwant Mann who posted the orders on the microblogging platform Twitter on January 12.
Of these, PSIDC, incorporated in 1966 to act as a catalyst for the development of large and medium-scale industries in Punjab, is in heavy losses, which have wiped out its entire net worth. The corporation has defaulted on funds raised from the market through bonds, and its accumulated losses stood at ₹681.30 crore on March 31, 2022, according to official documents. A white paper presented by the AAP government in the state assembly in June last year painted a grim picture of the financial position and management practices of PSIDC. “Presence of such defaulting entities in the state’s portfolio harms resource mobilization prospects of other state-level undertakings in the state,” it said.
Kudni, who was the party candidate from Lehragaga in the 2017 assembly elections, is still to assume charge as the formal notification and police verification are awaited. “The orders are expected in three-four days,” he said. Punjab Large Industry Development Board and Punjab Medium Industry Development Board were set up in 2008 for involving the leading players from the industry in the decision-making processes of the government, but they do not have any official set-up so far, according to two officials familiar with their working. Chhabra, who has been appointed to the board for large industry, is a former mayor of Chandigarh and joined the AAP from the Congress in August 2021. Garg, appointed to the medium industry board, is the ruling party’s spokesman in Punjab.
A Congress leader, who headed one of the two boards during the previous government, also said there was no real work as the two boards exist in name only. “There was no managing director or board meeting. These are just for status,” he said. The chairmen of these boards and corporations are entitled to ₹25,000 as pay, an official vehicle and rent for accommodation, costing at least ₹60,000 a month each to the state exchequer. They also get an office and personal staff.
A senior official of the department said that the appointment of chairmen of boards and corporations was the prerogative of the state government. The AAP, which was earlier critical of the previous governments for appointing political persons as heads of boards and corporations, also appointed party leaders as chairmen of six more boards and corporations under the various departments two weeks ago.
These appointments fly in the face of the recommendations of the Sixth Punjab Finance Commission headed by former chief secretary KR Lakhanpal, which said that boards and corporations have become a “parking lot for henchmen of the ruling party” and stressed the need to review their utility and viability by a third-party professional. In its report submitted to the state government in March last year, the commission suggested that there should be no further investment in them (boards and corporations), no recruitment of new staff, and no appointment of non-officials to boards and corporations. The state has more than 60 boards and corporations, including 20 inactive ones.
AAP’s state chief spokesperson Malvinder Singh Kang, however, said the state government made the appointments with a constructive approach and the new appointees would give their best to improve the working of these undertakings. “If any of these enterprises are making losses, the government and the newly appointed chairpersons will make efforts to turn them around. Unlike the previous Congress government where Capt Amarinder Singh had packed his office with dozens of advisers and burdened the state exchequer, our government aims to bring positive change,” he said.
