Privatising PSU Management
Swadesh Dev Roye
WITH the ulterior motive of aggressively pushing its reckless drive for privatisation of Central Public Sector Undertakings (CPSUs), the central government has devised a notorious scheme to appoint individuals from private corporate houses to the post of Chairman and Managing Director (CMD) of CPSEs.
The selection of CMDs and functional Directors of CPSUs has usually been carried out by the Public Enterprises Selection Board (PESB), which comprises one chairperson and three full-time members. Established in 1987, the PESB has, since its inception, been headed by distinguished retired CMDs of CPSEs or retired government secretaries.
The established process for selection involved open advertisement, shortlisting of candidates through application scrutiny, and face-to-face interviews. A panel of three candidates would then be selected by the PESB and submitted to the Appointments Committee of the Cabinet (ACC), which would appoint one individual from the panel. Over the decades, a well-regarded practice evolved whereby CMDs and Directors were appointed from among eligible candidates within the concerned CPSEs – commonly referred to as ‘departmental candidates.’
However, driven by its rabid anti-public sector agenda, the current government has overturned this time-tested policy of appointing departmental candidates to the top posts in CPSEs. The NDA government has now begun appointing CMDs of CPSEs from the private corporate sector. In a cabinet meeting chaired by Prime Minister Narendra Modi, a retrospective policy change was adopted to allow the appointment of PESB chairpersons from the private sector – effectively superseding the 1987 Cabinet resolution.
Based on this alarming decision, Mallika Srinivasan, CMD of Tractors and Farm Equipment Limited (a private company), was appointed chairperson of the PESB on April 1, 2021. Despite the expiry of her extended tenure and having crossed the age limit of 65 years, she has been given further extension to continue – a first in the history of the PESB.
What is also disturbing is that interviews for the post of CMD in CPSEs have now been reduced to mere formalities. In blatant violation of the PESB’s earlier impartial and unbiased functioning, the current PESB, acting in collusion with the government, has adopted a disturbing policy of systematically rejecting all departmental candidates from CPSEs. While the due process is formally followed, the PESB now routinely reports to the ACC that no candidate from the CPSEs is found suitable. Consequently, it recommends arbitrary appointments through a mechanism called the ‘Search-cum-Selection Committee’ – which, unsurprisingly, has been consistently selecting candidates from the private sector.
This dangerous pattern of undermining public sector autonomy and favouring corporate interests is now occurring repeatedly and without interruption under the Modi regime.
NTPC IS THE LATEST VICTIM
In recent months, interviews for the post of CMD for several CPSEs have been conducted. Shockingly, in all these cases, the current PESB has failed to select a CMD for even a single CPSE. In each instance, the PESB has submitted a routine report to the Appointments Committee of the Cabinet (ACC) with the standard remark: “None of the candidates found suitable,” and has recommended the formation of a Search-cum-Selection Committee instead.
This is a matter of serious concern, as the CPSEs in question include core and strategic sector enterprises such as ONGC, IOC, BPCL, HPCL, BSNL, NTPC, and UCIL. For each of these posts, the average number of candidates interviewed was around 12 – most of them departmental or internal candidates from the CPSEs themselves.
The most recent example is the selection of CMD for NTPC. A total of 12 candidates were interviewed. Notably, the list included NTPC’s own Director (Fuel), Director (Operations), a Managing Director currently on deputation to GSECL, and an Executive Director from NTPC. The list also featured Directors from other prominent CPSEs such as Coal India, MMTC, Power Grid, Container Corporation, and THDC.
Despite the impressive credentials and records of these candidates, the PESB rejected all of them – a move that appears blatantly biased and inexplicable. These are senior officials with outstanding track records in some of the most successful CPSEs in India, yet none were deemed suitable for the role.
It is worth emphasizing that the directors and executive directors rejected by the PESB have been among the key architects of NTPC’s sustained growth and performance. Today, NTPC stands as India’s largest integrated power company, contributing nearly 25 per cent of the country’s power requirements. It has an installed capacity of 81,000 MW, and an additional 32,000 MW – including 15 GW of renewable energy – is currently under construction. NTPC is on course to become a 1,00,000+ MW power sector giant, with a target of achieving 60 GW of renewable capacity by 2032.
Its operational efficiency is unmatched, with a Plant Load Factor (PLF) of 77.44 per cent, significantly above the national average of 67.23 per cent.
Financially, NTPC has shown consistent growth, recording a profit after tax of Rs 23,953 crore in 2025, a 12 per cent increase from the previous year. It paid a dividend of Rs 8,000 crore in 2024-25 – marking the 32nd consecutive year of incremental dividend payments.
NTPC has a well-diversified energy mix, including thermal, hydro, solar, and wind projects. It is also expanding into new areas such as battery storage, pumped hydro, waste-to-energy, nuclear energy, and green hydrogen solutions. Moreover, it has actively participated in bidding for power distribution in Union Territories.
The above physical and financial performance of NTPC speaks volumes. It raises serious questions about the PESB’s refusal to select a CMD from among these highly capable and proven candidates. The pattern suggests a disturbing shift away from merit-based and departmental selection, towards arbitrary and opaque processes favouring private sector appointees. This undermines both the autonomy and integrity of India’s public sector institutions.
GRUESOME GAME
The equity of the aforementioned CPSEs has already been largely divested – in most cases, more than 50 per cent – through the stock market. This financial onslaught is being aggressively advanced under the National Asset Monetisation Pipeline, along with other instruments, resulting in a situation where the majority equity in these CPSEs has effectively been captured by market forces.
Yet, despite this large-scale financial privatisation, the management of these CPSEs remains in the public sector. The current move to appoint CMDs from the private corporate sector – while systematically bypassing deserving departmental candidates – is clearly aimed at facilitating managerial privatisation from the top.
And this is not limited to the CMD post alone. The Board of Directors of CPSEs are already crowded with ruling party politicians and private sector professionals, appointed under the misleading label of ‘Independent Directors’ by the government. These appointments reflect a larger pattern of political and corporate capture of public enterprises.
To fully grasp the severity of this situation, one must connect it with the fact that in nearly all CPSEs, the workforce has been entirely contractualised. In other words, recruitment of regular workers has been effectively stopped, and the entire operational and maintenance workforce is now supplied through private contractors.
Take NTPC as a striking example: it employs roughly 1,20,000 contract workers in permanent and perennial core operations and maintenance roles, whereas the number of permanent workers is just around 4,000. Of course, there are about 12,000 executives, but even this layer is now being targeted.
Reports suggest that the government is considering a scheme to fill 50 per cent of Executive Director (ED) posts in CPSEs through lateral recruitment from the private sector. If implemented, this will complete the vicious cycle: CMDs from the private sector; ‘Independent’ Directors who are political appointees or private professionals; EDs brought in laterally from outside and a fully contractualised workforce – this would mark the complete dismantling of public sector management – in structure, spirit, and function.
NEED FOR COUNTER EFFORTS
Traditionally, the appointment of CMDs or Directors in CPSEs has not been a direct concern of trade unions. But the current scenario is far from ordinary – it is an alarming and systematic assault on the very existence of the public sector. These developments must be understood as an integral part of the broader fight against privatisation.
The appointment of a corporate CEO as chairperson of the PESB should have raised red flags long ago. Today, the PESB has been reduced to a mechanism for facilitating the privatisation of CPSE management.
The immediate task is to launch a massive campaign and propaganda drive to mobilise public sector workers and anti-privatisation forces across the spectrum. This campaign must lay bare the government’s intentions and explain the grave danger of complete elimination of CPSEs.
The fight to defend public sector enterprises is not just about jobs – it is a battle for economic sovereignty, democratic control over national resources, and the public good.
