Report of the Public Administrative Efficiency Study, Vol-4, 1989

Abstract

The Working Group on the Relationship between Ministries and Corporations studied seven public corporations, BCIC, BSEC and BSFIC in the manufacturing, TCB and EPB in the trading, BADC in the agricultural and BWDB in water development sectors. The Group held nine meetings and adopted the following recommendations arranged in relation to the objectives as mentioned in the TOR. A. Higher Standards 1n Administrative Performance (1) Implementation of the following government policy directives, vide President’s Order No. RAS/MAPA/(OBI) - 2/87-17 issued on March 16, 1987: (a) Guidelines, 1976, issued from the Cabinet Division defining the Relationship between Government and Corporations and between Corporations and their Enterprises. (b) Resolution, 1983, vide Cabinet Division Notifications no,. 4.5.82/285 -Committee dt. July 24, 1983, concerning, inter alia, operational autonomy of the corporations and transfer of shares of the enterprises to the respective corporations. (2) Organisational reforms: (a) Conversion of BCIC, BSEC and BSFIC into holding corporations/ companies in the light of the Resolution, 1983 and Ministry of Industry’s Notification dt. 9.7.88'. (b) The ministries should assist the public corporations to strengthen the corporate planning functions, setting objectives, selecting strategies and planning implementation. (3) Enforcement of accountability: (a) Formation of an audit sub-committee of each board headed by the Finance Director to study the key areas of observations made by the commercial and statutory audits and for taking appropriate and quick corrective actions. (b) Visits to and evaluation of performance of the enterprises and projects by top corporations’ officials such as the Chairmen and Directors/Members of the boards. The key areas to be examined are plant capacity utilisation, productivity, down-time analysis, usage ratio etc. of the enterprises and progress of implementation of various activities of the projects. In addition, they may also examine selected financial ratios in order to check the productivity of labour and capital, ability of the enterprise to meet financial commitments, current sales performance and return on capital etc. The objectives are to identify the problem areas and forewarnings about a corporate sickness and to prescribe corrective measures. (c) Effective follow-up by the CPC of corrective measures directed on review of the performance submitted by the corporations in the SABRE format through the concerned ministries. (d) Introduction of regular interactions between the heads of enterprises/projects and the chairmen and directors of the boards in order to countercheck the validity of structured information flow through MIS. (e) An appropriate motivational mix of recognition and appreciation, power and authority, promotion prospects, operational authority and security for the executives should also be Introduced in connection with the enforcement of accountability.