Upcoming Changes To PSUs 2023 Latest Update
Upcoming Changes To PSUs: “Everyone in the Kanyakumari district who owns even one acre of rubber land drives a Maruti. A state-owned business that manages thousands of acres of rubber land reports losses.
In a conversation with this writer last year, a rookie DMK minister questioned whether we shouldn’t fire those employees and shut down such units.
Why do the majority of the public sector businesses that bureaucrats oversee experience losses if they are chosen through one of the most competitive examinations?
There are several explanations, ranging from a lack of new ideas to a lack of consistency among authorities to some public enterprises’ role in promoting public welfare.
The state of Tamil Nadu’s finance department has now made a small step in creating a culture of performance effectiveness and accountability among state-owned public firms.
It hired the worldwide consulting company EY (Ernst & Young) a few months ago to do a financial and operational analysis of PSUs and statutory boards managed by the state’s Bureau of Public Enterprises (BPE).
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“The PSUs must rethink their roles in society. That is the main reason behind the decision to hire a consultant, according to T Udhayachandran, secretary of finance for the Tamil Nadu government. When there have been many changes and there are fresh issues, he continues, “We need to monitor the general performance of state PSUs on objective parameters.”
Not only is it important to consider how well public enterprises perform financially and physically, but also how they contribute to the overall state economy. It is necessary to move them. “When evaluating their performance, people typically look at the project to evaluate how it operates and how it does financially.
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They examine their financial performance on a quarterly basis. But that was more of a postmortem. They require a thorough examination to determine the quality of their cash flow, cash management, and financial management. EY will investigate everything, according to Udhayachandran.
Every business today needs to keep an eye out for new developments in their industry. For example, the government-owned Sipcot has been developing industrial parks for years. But today it encourages gardens tailored to specific industries, such as those for non-leather shoes, food, and electric cars.
It must now consider each industry’s unique needs rather than just building roads and pipes. Both stakeholders and the industry should be consulted.
Based on published or easily accessible data for the previous 10 years, the consultant will examine the historical performance of around 50 selected firms out of 66 state public sector enterprises and compare those results to those of private sector rivals.
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“When evaluating PSU performance, one must contrast it with either the private sector or other PSUs that perform at the highest level. Given the scale of operations, An Aavin and Amul do not need to be contrasted.
However, it can be contrasted with Nandinee in terms of performance and room for growth. Along with incorporating best practices from other places, we will improve our management of cash, assets, and finances. The main goal is that, according to Udhayachandran.
There will be periodic reviews even though EY has two years to finish the entire investigation. The initial one is anticipated to start in two months. Some of the long-standing issues affecting PSU performance will be resolved by this action.
A PSU is a commercial entity and needs to adhere to better processes, have the right people for the proper positions, and follow better procedures, says M. Ponnuswami, co-chair of the CII MSME National Council focus on cost-cutting like the private sector.”
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In addition to preparing for the proper sized workforce and timing of development, there is a need to concentrate on enhancing productivity and work culture. PSUs should allocate adequate funds for R&D and should regularly monitor and be aware of new worldwide prospects. There will be a ton of room for expansion if they do, according to Ponnuswami.
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