PSUs ~ Current Models

PSUs have played a humongous role in building the infrastructure of our country. The model which some of the old timers (people around 50 plus today) are familiar with are the additional role they played in generation of employment, building of local infrastructure such as hospitals and schools. NLC is a standing example. Slowly they became tools in the hands of politicians to scurry favours starting from favouring their constituencies for the next capital investment to influencing employment etc.

Slowly the PSU transformed to behemoths and became a sink which draining the public exchequer.  So we saw action taken to wound down some of them.

We also witnessed in the utilities sector emergence of some central utilities like NTPC, PGCIL, NHPC, NHAI and so on so forth. These PSUs are different in as much as they were incorporated by the centre, but as per the concurrent list their main functions fell in the domain of the states. So here we have central utilities built with the cost of equity paid by the state and still not receive any return on the equity, while paying for the services at market determined rates, linked to international bench mark! Over the years, these central utilities have become behemoths and now a need is felt to encourage Private sector.

So we witnessed a burst of growth in private sector investments especially in two sectors Power Generation and Roads. But that has come down to a trickle owing to various factors. Now efforts are being taken  to entice the corporate back and hope their appetite will emerge.

In the process, some of the initial roles of PSUs and prime responsibilities got hijacked and we saw unparalleled imports, which has built some of the huge global brands in South Korea and China. This made the Indian corporate to attach themselves to some of these corporations for sustenance. Services rendered by Indian corporates, their accountability to the Indian corporate tax structure never figured in the factors, which weighed in the awards of contracts and investments. Chasing foreign borrowed capital, we threw some of our main strengths ~ namely the size and the strength it offers to negotiate a deal which would benefit the large mass of Indian citizens. 'Made in India' was given the go by. Thankfully once again we hear many nosies about the theme 'Made in India'.

What else can be done to correct, and bring back the focus the roles PSUs must play:
  • Any capital project constructed in Indian soil shall be done by a Firm registered in India and hence are assessed under the Indian Tax structure. 
  • Open siphoning of margins through 'High Sea Sale' contracts and 'Divisible Contracts' should be done away with.(Any way some of the projects are assigned the exalted status and claim exemption). 
  • Each major infrastructure project generates employment, in the manufacturing sector, services sector and construction sector. PSUs are aware and actively encourage, under the garb of 'L1' bid, firms to work and optimise the cost of engagement of labour. There must be mechanisms which ensure that 'Direct' employees are employed and even 'Contract' labour are eligible for all the benefits. Open recognition of the cost of engaging 'Direct Labour' shall be factored for evaluation of a bid. They shall ensure that the employees who build the project, including the unskilled work force derive all the benefits starting from wages. These should be budgeted and expenditure monitored and shall become reportable in the statements of PSUs. 
  • Cost benefit analysis should include factors like long term benefits to the Economy. Amounts spent in local area development including providing public health services attached to a Power Generation project of a PSU for instance, must be able to access cheap credit from the special schemes of the centre or grants. 
PSUs have become more important for their ability to raise capital and the other more important factors are being ignored. It is time a major structural reengineering is done and their role is substantially modified.

Inflation in Marks!!

Often we read about some of the colleges fixing admission for those who have scored 100%. An insightful piece with authenticated data (I believe because it is in The Hindu Publication) says that over the last 6 years, students who have scored more than 95% in CBSE have increased 23 times. This as most of us would tend to agree, by personal experience has become a chronic problem.

This way. the existing system fails in its primary duty of classifying the students in different groups. It is time that this issue is addressed and a better mechanism of examining the students is devised to bring out the differences.

CPGA seems to have failed. We need to look at alternatives.

At the other end, that is even after post graduation, most of the high performers we need grooming and in-depth training whatever be the field of employment.

Mismatch needs to be addressed as the money being spent on education by parents are being wasted.

Bihar Elections

There is so much which is happening in the Bihar elections. As an individual and as a 'Bahari' but Indian citizen, what do I look for as a positive outcome? My simple answer is ~ Outright victory for BJP. Why?
  1. Because, after many generations, Bihar can again have an effective voice at the centre - not the obstructionist version. Congress did very little, except find specialists such as Babu Jagajivan Ram who could garner support and control at the centre but continue to ignore their home constituency. This is no longer possible. If you win the state elections and gain control at the centre, you better keep some of the promises made. 
  2. For too long we have been in election mode and we need to return to governance. 
  3. There are serious matters of national importance pending as the polity is fractured by individual and state level aspirations. For the better or worse, we need a central level party to look  at the nation as a complete unit and act.
Will the BJP win? 
I wager that they will. 
Why?
  1. They have committed to work at booth level and ensure the first past the post work for them.
  2. As this article brings out a new dimension - the kin of Bahari may be the swing factor. 
  3. Caste does play even today - but can be overcome by other more mundane conditions. 
  4. Anti incumbency.
  5. The persona of our PM. You cannot discount the influence this will have on the rural electorate. Afterall they are seeing someone like this after Smt. Indira Gandhi and Sri Atalji.
Rejoinder on 8/11/2015

My predictions have proven wrong and way off the mark. The Mahaghatbandhan, has swept the elections. The fact that they might have had a vote differential of over 10% vote share in the final tally, speaks volumes at the alignment of the voters across ages, sexes and castes. No amount of rhetoric, could wean away the electorate from giving the leadership to Nitish. 

If there is one common factor that is common which cost the BJP Delhi and Bihar, it is the absence of  local tall leader. A bahari is not wanted by the electorate at the state level and that is the lesson which pollsters must retain from this election round. 

NJAC - Stuck down ~ Wrongly and must be corrected with a legislative effort.

Much has been said and written about this verdict. And for a change Arnab Goswami compered a discussion that brought out very interesting points. Prior to this were a series of articles and the Readers Editor of The Hindu had summed it up in his weekly report titled 'Moment to Cherish - Moment to Reflect' .

Justice Lodhas views as in the 'Op ed column' sum up one side of the argument and provides a good background to the views of the judiciary.

For me, as a citizen, this action of the judiciary to frown upon the executive, and comment adversely while not cleaning up their own domain, is a bad precedent and must be corrected through a legislative action. The constitution in Article 124 confers the power to appoint judges of the Supreme Court and High Courts on the President of India after consultations with such of the Judges as the president may deem necessary. As Justice Lodha indicated that 'consultations' has been interpreted as 'concurrence' by the judiciary. Sri Arun Jaitley, one of the most respected voices, in the current cabinet indicated many instances when this 'concurrence' has been misused.

The current genre of politicians have earned the distinction of being unreliable, corrupt and self serving and that has coloured the opinion of the judgement, is clear. It therefore assumes that the electoral system as it is in the present form, will continue to elect and empower legislature which will not be much different than the current.

Such premonitions may be well found given the mounting evidence, but does not justify by any stretch of imagination assuming the powers themselves.

The Judiciary has erred in assuming that it can provide solutions for every problem including appointing its own self. We cannot have a situation where there is continued 'Opacity' in the appointment of judges and there is a distinct possibility that a wrong decision can be made in the choice of future judges.

In my opinion, as mandated in the constitution article 124, Judges of the Supreme Court and High Court shall be appointed through a 'Consultative process', where the Legislature and Judiciary have to reach a consensus. None is superior over other ~ and each is supreme in its own sphere.

The moment has arrived when the institutions which our forefathers have framed, have to put down their mutual animosities, and mistrust and reach a consensus for a way forward. This is evident from the various exchanges, as both sides have admitted that there is scope for improvement in the current system of appointment of judges and that it is essential that this done early.

As Justcie Lodha majestically sums up in his article ~ " Appoint good judges; the rest will follow."

Another good lead by a respected Judge Re-Inventing the Collegium  



Dear Readers Editor,

I am surprised that my Reader's Editor is compelled to rely on his linguistic skills to justify the errors which continue to be reported in the process of bringing out 'The Hindu' as a final product. 

As you have eloquently defined Newspaper is a final product achieved through 'a collaborative process, where nearly 300 thousand words are processed for multiple edition by more than 800 journals within a limited time-frame with a single objective of projecting a comprehensive picture'. 

This is a process which is centuries old, but increasingly being supported by technology to drive timely delivery at multiple centres, better quality, better presentation and without errors. 

Today, there are many established systems such as KAIZEN, SIX SIGMA and other QC processes, which ensure near zero errors.  Having understood the process, it is the responsibility of the Editor and the management to put in place process improvements, checks and balances to ensure an error-free product.  It is also essential that these improvements are done in a closed loop manner. So for every error, there must be a corrective action plan implemented and verified. 

My Suggestions: 

1.  Each journalist  will be responsible and held accountable for filing an error-free report(component stage inspection);  In the event of errors cropping-up in the reports, he will have to file his report earlier for multi stage editing(introduce multiple checks to ensure error free component). 

2.  Once the journalist report is chosen for publication, the articles shall be scrutinised by Experts trained and who have the skills to identify the errors(Recruit many C.S. Naryanans or train persons to make Narayanans!).  These are human efforts and currently,  organisations like 'The Hindu' can invest in technology and develop a suitable system to make it operator free. 

3.  The Editor should set 'Zero Error' targets for each set of people and through stages to the entire Newspaper for brining out absolutely error-free edition and one day of a week, say, Saturday edition, shall be error free. Any error on the Saturday edition should be viewed seriously and punitive action taken.   

I love this paper and am making this suggestions encouraged by 'The Hindu' management and your pro-active plans. 

Regards, 
Balakrishnan V 
9840121596 

Founder's day

September 28th of every year used to be a date which I remember from 2003 for an additional reason - that it was the birthday of my CMD, BGR.

This year we observed it as the first Founder's day. 

In my wildest of my imagination I could have never thought of participating in one such function. Nevertheless there I was dressed up in simple office attire to participate and drove to the unit, where it all started for BGR in 1985.

The persons on the dais, his wife, children and the fortunate few of my colleagues who had spent more years with him than me, spoke along with a person from the worker group. They shared many tidbits and reminiscences, nostalgic memories. His daughter spoke of the personal side and shared some insight with those gathered.

The function set me off on to my thoughts to write my own tribute to BGR, whom I joined in Sept 2003.

It was a very simple decision for me to join BGR group, then GEA Energy.  The organisation, which I had worked in from 1981 till 2003 had made great strides, building up significant new capabilities and notched up achievements of national importance over the years. In 2003 it was taken over by a promoter group who had different plans. In the brief period that I operated under the promoter group, I learnt what is non professionalism. I also learnt how individual creativity can be effectively killed.

So it was refreshing to see BGR who as the CMD of a company though of much smaller size, speak out what I would later realise as the 'Management Thoughts' which I was missing and wanted at the workplace where I would serve. Added to that there was no locational change and the decision was simple. Encash the service record built painstakingly for over 22 years and move to other pastures. 

I am glad that I took that decision.

Having joined the company, it was clear from the initial days, that there were many people in the organisation, who are dreamers starting with BGR. (Many still continue) We were all employees of a small organisation, but with big thoughts and we always aimed at achieving some thing huge. 

Over time we proved that we can deliver on what we set out to achieve as a sequel to our dreams under the leadership of BGR.

Echoing the thoughts of the speakers at Founders day ceremonies, I believe BGR gave us that freedom, which has helped him shape the organisation he wanted it to be. He has taken it to the heights which we all of us are proud of today. 

Some of the dos and don'ts which reflect the qualities of a great corporate leader which I experienced first hand in the interactions with BGR and the policies he pursued are worth sharing: 

In the 10 years, I have worked with him, he has never ever overruled my decision on recruitment or procurement. If he doesn't agree he will share his views and make me change my recommendation or concur with mine. Never have I been handed down a decision. His resolve to honour commitments especially to the financial institutions is exemplary. He respected his executives, and was willing to reward performance.

Even when I did something which was to his total dislike, he felt it necessary to seek why I did it before reprimanding the action. Even though it was only once, he didn't mention it again. He was though highly opinionated and some of us knew to live with it. This aspect of his tended to favour a few and work to some other's disadvantage; but then it had its virtues as well.

He would expect his executives are respected by every one. Any one who is discourteous to his executive, will be treated as having been discourteous to him as well.

There were many dreams, which he had for the company through the division, which I head. One was to do something in optic fibre. I am glad that I made that happen, with we emerging as one of the preeminent performers in optic fibre installations associated with power lines. We won an award in nuclear project beating an organisation which he considered worthy of beating and that too by a whisker of a margin. He wanted us to bring in niche products, which we are yet to achieve and continue to work on it. 

He wanted the division to achieve at least a ₹1000 crore sales, with a order back log to sustain the operations and scale up. We are far away from that task and I am sure the division will work to achieve this dream also over time. 

The first order, for which we had celebrations in boat club lawns with all the key officers of the company and customer's representatives, was only Rs.30 crore. That was 10 years ago. BGR would now celebrate if we secure orders more than ₹1000 Crore and it will be my endeavour to work for it in the months and years to come. 

And when we do celebrate, which I am sure we will, we will not only miss BGR's physical presence, we will miss the great host in him as well.  Nobody will ever come close to the host BGR was.