Policy Regarding Sick Units

In 1991, Public Sector Units were also brought within the jurisdiction of the Board for Industrial and Financial Reconstruction (BIFR). Therefore, it is the BIFR that will now decide whether a sick public sector unit can be efficiently restructured or whether it has to be closed down.

As on November 30, 1999, 240 cases of public sector units were mentioned to the BIFR, of these, 170 were recorded and 29 of these cases were suggested for winding up.

To assuage resentment among workers, the government has established a National Renewal Fund (NRF). This fund is to be utilised for retraining and redeployment of economised labour and to offer compensation to public sector employees attempting voluntary retirement.

Memorandum of Understanding

You need to know that the concept of Memorandum of Understanding was launched in 1988. The main goal of the MOU was to decrease the Quantum of control and improve the quality of accountability. Through the MOU, more autonomy was given to PSUs. It intends at moving the management of public enterprises from the management by controls and processes to management by results and goals.

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