Several CPSEs seek fixed three-year tenure for serving CMDs
New Delhi: Amid the government mulling giving a fixed three-year tenure for PSU heads in future appointments, several Central Public Sector Enterprises (CPSEs) have sought similar tenure for currently serving CMDs.
"There is a demand from certain Public Sector Units (PSUs) that the serving Chairman-and-Managing Directors should also get three-year extension," an official said.
The present proposal is only for new appointments for the top-post.
The Group of Ministers (GoM) on public sector reforms, headed by Finance Minister P Chidambaram, had approved the proposal for a minimum tenure of three years for chairmen of state-owned firms, irrespective of their superannuation age.
The proposal was mooted by a government-appointed panel headed by former SAIL Chairman S K Roongta.
It is learnt that the Department of Public Enterprises (DPE) has recently sent a note in this regard to the Cabinet for its consideration.
Currently, an internal applicant should have at least two years of service left for him or her to be eligible for applying for the top job. This meant anyone in the age group of 58 to 60 years is disqualified for the post of CMD.
Also, all directors as well as chairmen of public sector enterprises compulsorily retire on reaching the superannuation age of 60 years. This meant that some would have a very limited time on the board to shape policies.
"As a result of this, highest functional directors who probably are senior to the new CMD, are demoralised. Therefore, it does create a kind of anomaly in the functioning," the official said.
Besides, the GoM considered other suggestions such as providing greater autonomy to CPSE boards for selection of joint venture partners and acquisition of companies.
As on March 31, 2012, there were 260 CPSEs (excluding seven insurance companies) with a total investment of over Rs 7 lakh crore. These companies employ 13.98 lakh people.