Gujarat to adopt carrot and stick policy for PSEs

The Gujarat government may soon adopt a carrot and stick policy for the state's 46 Public Sector Enterprises (PSEs) soon.

At present 11 PSEs in the state are running into huge losses, while five are no-profit enterprises. Eleven are making profit, while the performance of the rest of the PSEs is on the borderline.

The purpose of the new system is to reward and give more support to the PSEs performing well, and take action against non-performing PSEs or those with poor performance.

Highly placed sources in the state government said, "To improve the standard of State PSEs, now the state government is planning to adopt the guidelines set by the union government's department of public enterprise (DPE) for setting up performance standards for the state PSEs.

Initially, the PSEs will be rated on the basis of their performance in various aspects. Thereafter the profit-making and well-performing PSEs will be rewarded, while strong action will be initiated against the loss-making and poorly performing units."

"At present, monitoring and performance appraisal system of weak PSEs are not much effective, as even state finance department failed to prepare annual reports. The system will also be improved for better monitoring and control," sources said.

"The DPE has set high standards for the performance, timely and proper auditing, maintenance of subsidiary companies, control of finances, and preparation of various effective administration reports. These will be adopted by the state PSEs too," the sources said.