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Is international consultancy required for Tamil Nadu public sector undertakings?

By NS Venkataraman* 
It is reported that that Government of Tamil Nadu’s has appointed an international consultancy firm to study the state of public sector undertakings in Tamil Nadu and submit it’s report with recommendations and action plans to restore the health of public sector units in the state. The consultancy firm has been given a period of two years to study the details and submit it’s report. It is not clear what is the remuneration that would be paid to the consultant for the assignment.
Some critics are of the view that there are inherent issues in the functioning style of public sector units itself, marked by “lack of ownership feelings” amongst the top most executives, political interference and bureaucratic style of administration. According to these critics, the very fact that large number of public sector units in Tamil Nadu are sick and some of them have been closed due to heavy losses,only prove this negative view about the public sector units..
However, this critical view does not seem to be appropriate. In the case of Tamil Nadu, while several public sector units are sick, Tamil Nadu Newsprint & Papers Ltd. at Karur, a government owned company, has been consistently generating profit, has expanded capacity more than once, diversified it’s operations efficiently and the operational parameters are competitive.
While an international consultant has been appointed to study the state of public sector units in Tamil Nadu, the fact is that the problems confronting the units are known and the solutions are also known. With several decades of experience in operating public sector units in the state and with many persons with proven techno managerial capacity staying in the state to identify the issues and find the solutions, probably, there is no case for appointing international consultant.
Such overseas consultant need to understand the work culture, administrative pattern and political climate in the state from scratch and then come out with some solutions after two long years.
Probably, the overseas talent appeal to Tamil Nadu government more than the local talent for whatever reasons!

Sick unit – case study

Some of the important public sector units involved in the promising fields have been closed down such as Tamil Nadu Explosives at Vellore and a few others. A careful analysis of the reason why such units have been closed would give adequate inputs to identify the problems and arrive at solutions.
In the case of Tamil Nadu Explosives, no worthwhile efforts were made to update the technology from time to time and introduce new products in tune with the changing trends, particularly due to product obsolescence, which most other major explosive units in the country have done successfully. Obviously, the top management of the unit lave failed to take appropriate steps in time to forge ahead and lacked long term corporate strategies to sustain growth.
So many other similar case studies of lack of forward planning and inadequate long term corporate planning exercise can be described such as that of Tamil Nadu Minerals Ltd., Tamil Nadu Cements Corporation Ltd. and others. These organisations have enormous opportunities for expansion and diversification but there seem to be no sense of urgency and everything moves on snail’s pace, which inevitably lead to sickness.
It has become a common practice to appoint IAS officers as chief executives of industrial units in public sector.
As IAS officers lack domain knowledge, as chief executives they face a piquant situation where they have to know the problems from the subordinates, seek solution from the subordinates and implement them with little grasp of technicalities involved.
Managing industrial and commercial organisations are not subject of mere administration but need techno managerial experience and expertise and the requirements vary between one industry and the other.
The issue is not that IAS officers have been posted but the fact is that they are not given adequately long tenure to understand the issues, particularly since they lack domain knowledge with regard to the industry where they are posted. Most of them have been transferred too quickly, even before they would get a grip on the issues and solutions

Chief executive matters

Now, the question is that while the public sector undertaking namely Tamil Nadu Newsprint & Papers Ltd. is turning out good performance, so many other units are not doing so even though all of them belong to government of Tamil Nadu and IAS officers are the chief executives.
The point is that the expertise and capability of chief executives who are in charge of these units and who are responsible for creating a progressive work culture in the organization matters. Ultimately, the question revolves around the capability of the chief executive managing these units.
Certainly, IAS officers who are posted as chief executives in most of the public sector units are capable bureaucrats and can understand the overall issues and solutions.. However, they cannot get domain expertise in their short period of stay. In many cases, the IAS officers who earnestly try to settle down in their job of running the industrial enterprise are suddenly transferred which comes as a bolt from the blue for them. They are forced to jump from one position to other such as chief executive of industry to managing director of women development corporation and then sometime even as election commissioner and so on.
The ultimate solution is to create a cadre of IAS officers and industrial experts exclusively to manage industrial and commercial enterprises in public sector and provide them training and ensure that they will stay with the units for reasonably a long time. In the present situation,where a public sector undertaking may have 3 IAS officers as chief executives in two years, no one would be accountable.
Finally, the write up would not be complete without saying a word or two about the minister in charge of industry, who also need to have adequate background and understanding. Is it possible in present conditions where MLAs are appointed as ministers with little regard for their capability and their expertise to discharge their responsibility in the ministry where they are in charge.
Certainly, the international consultant will highlight all these issues after two years of study, which is already known to the industry experts in Tamil Nadu.
With constantly changing political scenario and those ruling the state, such suggested solutions could even end up as one that would not be implemented in letter and spirit.
---
*Trustee, Nandini Voice For The Deprived, Chennai

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