The Telegraph
Since 1st March, 1999
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Job security for the weak in PSU sales

New Delhi, Aug. 19: The government has decided to introduce provisions that will ensure job opportunities for scheduled castes, tribes and other socially disadvantaged sections in the sale of public-sector undertakings. They will have to be laid off last in case of retrenchments.

In the past, provisions similar to these have been incorporated in some of the shareholders' agreements signed with buyers, but the Congress-led government wants to make this mandatory in line with its common minimum programme (CMP), which talks of extending the benefits of job protection to the SC and ST community.

However, senior officials made it clear that to what extent this protection is actually implemented will depend on the management of the individual firms. This means that current rules, which enforce a strict quota on both employment and even promotions, will not really be maintained as it is. But some semblance of the old order will remain.

The Congress-led government, which has kept a modest Rs 4,000 crore divestment target this year, plans to modernise and restructure sick PSUs, a key demand made by the Left, by inducting “private industry to turn around companies that have a potential for revival”. It has also made it clear that chronically sick PSUs would be sold off or shut down after workers had been paid off.

Although the government does not admit as much, it also plans to sell off other PSUs which do not fit in with its ideas of core and essential industries which the state must control. The move to privatise Delhi and Mumbai airports are expected to be the forerunners of many more such moves.

Typically, the provisions which will be incorporated in the shareholders' agreements or the purchasers' agreements will insist that new managements will cause the company to provide adequate job opportunities for persons belonging to disadvantaged groups like SC/STs and physically handicapped.

In case, any reduction in the employee strength is effected, then it will ensure that these people are retrenched at the end. The government directors who remain on the boards of such companies will be also charged to see to it that this protection is actually extended.

The move to protect socially disadvantaged sections of the society is expected to be a major political point that the government can use if the Left or the Opposition decries any attempt it makes to "restructure" PSUs.

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