Can PSUs Make Their Own Rules for Decision Making and Governance?

The primary reason for the establishment of Public Sector Undertakings (PSUs) is to address the inefficiencies often linked with bureaucratic procedures and outdated laws. PSUs are typically created to ensure quicker implementation of policies and actions without the traditional red tape that accompanies government agencies.

Power of PSUs to Make Rules

PSUs, particularly Navratna and Mahanavratna corporations, have a certain degree of autonomy in making their own rules and regulations. However, this autonomy is subject to the condition that their policies and actions must not contravene existing vigilance laws and guidelines set by the government.

Corporate Governance in PSUs

PSUs operating under the jurisdiction of the Central Public Sector Enterprises (CPSEs) must adhere to the corporate governance rules framed by the Department of Public Enterprises under the Ministry of Heavy Industries and Public Enterprises in New Delhi. These rules and guidelines help ensure accountability, transparency, and efficient operations within these organizations.

Internal Rules and Regulations

PSUs can develop their own internal rules and regulations as long as these comply with the guidelines issued by the Bureau of Public Enterprises. They must also ensure that their rules do not violate any general laws of the country. These internal rules are often approved by the Board of Directors. For instance, rules such as the RBI Staff Regulations 1948 are examples of internal policies that guide the operations of PSUs.

Employee Conduct and Discipline

To maintain a harmonious working environment, PSUs have established a set of Conduct and Discipline Rules. These rules are designed to restrict employees from making statements that criticize government policies or actions, thereby avoiding unnecessary public embarrassment or conflict. The rules are put in place to foster a positive and professional work environment.

Challenges and Opportunities

PSUs face challenges such as poor policy making, over-staffing, and high operational costs. However, the freedom to make their own rules can empower these organizations to innovate and improve their operations. With the right governance framework, PSUs can play a crucial role in driving economic development and ensuring efficient service delivery.

Conclusion

While PSUs have the autonomy to make their own rules, they must operate within the bounds of existing laws and regulatory frameworks. This balance between autonomy and accountability is essential for the success of these organizations. As such, it is crucial for stakeholders to support and participate in the continuous improvement of these guidelines to further enhance the effectiveness and efficiency of PSUs.