How can we improve the public sector enterprises in Kerala?

 John Samuel

Following are the few of the recommendations  that I made in the session to improve the public sector enterprises, at the 4th International Congress of the Kerala Studies, held at AKG Centre, Trivandrum on 9-10 January, 2016




1)Make  a clear distinction between public sector companies involved in delivering essential services like water, electricity and public transport and  other state-owned enterprises designed to operate in the market place competing with other private actors. We also need to make distinction between sectors with government monopoly ( eg Kerala state beverages corporation ) and those enterprises that will face still competition from private actors in india and elsewhere.

Such a clear distinction is important for a clear strategy development to revitalise each of those enterprises to add value and make profit. As of now the loss is calculated mixing all these into one basket giving a very distorted picture to various stakeholders and public.

2) It is imported to re conceptualise these as peoples's enterprises rather than government owned enterprises as the predominant image is that bureaucratic establishments in partnership with a political elites attached with dominant political party formations. It is due to this approach that almost all such enterprises are 'administered '( rather than managed) by typical status quoits bureaucrats rather than professionally trained managerial leaders with domain knowledge and marketing capability. Hence, there has to be moratorium to point typical IAS/IPS officers without any domain knowledge or management aptitude or to accommodate the cronies of respective ministers or the party. It is this 'administrative' , 'accommodative'  and adhoc approach that derailed most of these enterprises. This also resulted in corruption at all levels and a work culture devoid of any sense of accountability and transparency. Hence there is need for a paradigm shift at political , policy, governance , management and operational level to revitalise, sustain and make them profitable enterprises with a collective sense of ownership.

3) A strategic analysis of each of the enterprises need to be done and then decide the principles of capacity, market viability and adaptation to changing context of competition and market dynamics.

4)  initiate  a  multi-stakeholder discussion at each of the enterprises by taking all the employees and trade unions in to confidence. Such multi-stakeholder discussions should also involve management experts, governance experts, and also people with direct domain knowledge of the  specific product and the niche market for such a product. Each of the companies can develop a viable revitalisation plan considering all prose and cons.

5) Create  a special vehicle to attract new funding through new investments from NRI workers and small entrepreneurs from the GCC  and other countries.

5) Public  sector for essential services may be restructured to make then optimally efficient and economically viable, rather profit motive alone. However, other enterprises  designed to compete in the market place must have profit generation motive and they must be fully managed by professionally competent managers.

7) It is important to develop a broader social and political consensus about the political economy rationale of revitalising and sustaining such enterprises and boost people's confidence as the entire media discourse is that government should sell off all these to private actors, in consonance with neo-liberal   sort of 'constructed' 'common sense'. It is also important take the trade unions in to confidence about the need to take a long term perspective rather than a very narrow immediate interest perspective.

8) I think it is important to take a principled as well as pragmatic view on each of the public sector enterprises. The key challenge is that all of them are bogged down in operational baggages and cumulative mismanagement and a non-accountable work culture. This operational preoccupation and the cumulative politicisation of all aspects ( from appointment to purchase to management to governance to marketing ) have a debilitating effect and also play major hinderance to creative and strategic approach to the SOEs.

Without a broader political , policy and social consensus , there is a danger that  there will be a broad discourse ( driven by neoliberal agenda) to sell them off.
So we need a specific detailed  strategic approach for each of the companies, a broader policy and governance approach and a  consistent  advocacy at various levels