BackTop posts in Indian PSUs lying vacant
Top posts in large state-owned companies, including SAIL and NTPC, are either lying vacant or will be open for appointment soon
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New Delhi: At a time when state-owned firms are expected to play a key role in the recovery of the Indian economy with the government laying special emphasis on manufacturing, and are facing stiff competition from private companies, top posts in large state-owned companies, including Steel Authority of India Ltd (SAIL) and NTPC Ltd, are either lying vacant or will be open for appointment soon.
The fact that appointments to top positions is a time-consuming process means these will effectively remain vacant for quite some time.
The government has not extended the terms of chiefs of SAIL and NTPC. SAIL’s chairman and managing director (CMD) retired in June, and the term of NTPC’s CMD ends in August. While SAIL is expected to play a significant role in helping India achieve 300 million tonnes (mt) of steel production by 2025, NTPC is India’s largest power generation utility.
Another 62 full-time, board-level positions are lying vacant at various central government-owned units, according to Public Enterprises Selection Board (PESB), which oversees hiring for state-owned firms.
Of the full-time positions, 17 are for chief executives, while the rest are for posts of directors in fields such as finance, marketing, human resources and operations.
Some of the key positions are that of CMDs of companies including Oil India Ltd, North Eastern Electric Power Corp. Ltd and Bharat Coking Coal Ltd.
The PESB revised the guidelines for the selection process for board-level posts in May 2011. Given that the appointment of board-level executives is a time-consuming process and takes at least a year, the guidelines stated that such positions be advertised a year in advance of the expected vacancy. The PESB recommendations are supposed to be sent to the administrative ministry before the term of the incumbent ends. However, things have not moved accordingly.
In an announcement to the stock exchange on 11 June, SAIL said, “Consequent upon completion of his tenure and in pursuance to Ministry of Steel Order dated June 10, 2015, Shri C. S. Verma has relinquished the charge of Chairman & Managing Director (CMD) of Steel Authority of India Limited (SAIL) w.e.f. June 10, 2015 (A/N). Further, Ministry of Steel vide its Order dated June 10, 2015 has also conveyed that the additional charge of the post of CMD, SAIL has been entrusted to Shri Rakesh Singh, Secretary, Ministry of Steel for a period of three months or till the appointment of a regular incumbent to the post or until further orders, whichever is earlier."
In the case of NTPC, the Appointments Committee of the Cabinet (ACC) on 4 August issued an order, which recommended recourseto the search-cum-selection committee (SCSC) rather than following the PESB model. The term of NTPC CMD Arup Roy Choudhury ends on 31 August.
NTPC has an installed capacity of 45,048MW and holds 17% share of India’s power-generation capacity of 272,593MW. It has set itself a target of producing 128,000MW by 2032. It is also slated to play an important role for India’s green energy push with its plan to raise its contribution of renewable energy to 28% of its planned capacity by then.
The rationale for the SCSC route in NTPC’s case stems from the fact that the PESB model would take a year for fruition. At the start of the process, PESB sends a circular to the administrative ministry, which is then forwarded to the state-owned unit concerned in which the position is to be filled. The unit then sends a list of eligible candidates to the parent ministry, which in turn forwards the list to PESB, which scrutinizes it and calls for interviews. PESB shortlists two candidates in order of merit and sends the names to the parent ministry.
Then comes the role of the Central Vigilance Commission (CVC), which is critical. The shortlisted names are sent to the CVC for background checks. This involves sending out the names to all crime branches across the country to ensure that there are no pending criminal complaints or investigations. Only after this is concluded is a candidate’s name forwarded to the department of personnel and training, which then sends the file to the cabinet secretariat, which forwards it to the Union home ministry.
The home ministry finally sends the file to the Prime Minister’s Office for approval and is eventually notified by the parent ministry. In the case of term renewals, the parent ministry sends the name to the ACC through the department of personnel and training and asks the CVC for a fresh background check of the candidate.
The Narendra Modi government has placed special emphasis on manufacturing, where India lags vastly behind Asian economies like China, to boost economic growth, and has set an ambitious target of increasing the contribution of manufacturing output to 25% of the gross domestic product by 2025.
If that has to happen, the government needs to get its team in order.
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