7 yrs, several panels but no divestment | india | Hindustan Times
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7 yrs, several panels but no divestment

YET ANOTHER example of slipshod functioning and lack of coordination among different government departments has come to the fore. Seven years ago a Divestment Commission was set up. It envisaged to get rid of huge loss-incurring public sector undertakings (PSUs). But so far, neither any policy has been formulated nor initiative taken to lessen the burden on the State exchequer.

india Updated: Mar 13, 2006 01:08 IST

YET ANOTHER example of slipshod functioning and lack of coordination among different government departments has come to the fore.
Seven years ago a Divestment Commission was set up. It envisaged to get rid of huge loss-incurring public sector undertakings (PSUs). But so far, neither any policy has been formulated nor initiative taken to lessen the burden on the State exchequer.

As a result, thousands of employees and officers have been drawing their salaries without or very little work, proving a financial burden on the fast depleting State exchequer.

The Divestment Commission was set up under the Department of Public Enterprises in 1998 but it was disbanded. In January 2000, the State Divestment Commission was established to improve functioning and efficiency of PSUs/corporations, their possible reorganization and privatization. Twenty-seven PSUs/corporations and other bodies were referred to the commission.

However, the State Divestment Commission died a 'natural death' after submitting a report on 24 of the 27 bodies to the government. The reports were 'referred' to another Central Committee headed by the then Chief Secretary. However, nothing happened. The Central Committee did not bother to study the report and take a decision.

In April 2003, yet another high-level committee was set up for the same purpose. But this time it was under the Planning Department. The committee was empowered to decide on the procedure for divestment on lines of the guidelines provided by the Government of India. It was also supposed to make recommendations to a 'team' chaired by the chief secretary, which was expected to make a final recommendation to the cabinet.

However, in October 2003, the then chief secretary ordered merger of the 'team' with the so-called high-level committee. In turn, it decided in February 2004 to involve the high-level Divestment Committee, the 'team' and the Economic Development Committee of the Cabinet in the process of the divestment and dissolved all other committees formed for the purpose. The job of divestment was taken away from the Planning Department and was once again given to the Department of Public Enterprises.

It was also decided that the responsibility of implementation of various decision taken for divestment would be that of the respective Administration Department while the Planning Department would be responsible only for coordination and monitoring.

Later, the whole issue of divestment was referred to the Finance Department for its comment. The Finance Department has now recommended that an independent department/cell headed by the chief secretary should be set up to prepare a final report on the divestment after collecting information from all PSUs/corporations and other loss-incurring bodies.

A meeting to review the ongoing seven-year exercise and to consider the Finance Department's recommendations was convened today but it was later cancelled for unknown reasons.