The latest Economic Survey shows that from 1971-72, the emoluments per capita of public sector employees has risen from Rs 5,920, to only Rs 27,600 in the year 2005-06. Of course the survey says that since the rise has been more than that of the consumer price index, it “shows that the public sector has been rewarding its employees at a far higher rate than justified by consumer price inflation”.

Why is the government so squeamish in accepting this problem?

It is actually quite simple. If it links the pay of the PSU chiefs and board members, with the performance of their companies, the next step is obvious. To protect or even earn that pay, every chief and his board will clamour for more freedom to work and earn rewards. Of course they can also be hauled up for sloppy performance.

In bureaucratic parlance that means the companies will ask for more autonomy to get their act together. This is something that no political master or the tribe below can even countenance.

Far better instead, to ensure that with the low salary, the levels of responsibility are kept diffused. So if investments do not work or worse does not deliver, there would be no clear indication of who should be made accountable. The ministries and the companies can instead point fingers at each other.

Is it any surprise, that the public sector companies are sitting on a cash pile of over Rs 3,59,077 crore, by end March 2007. The Planning Commission has pointed out that most of the top twenty PSUs are zero-debt entities.

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