By Tarunkumar Singhal, Raman Jokhakar, Chartered Accountants
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Imagine a train without an engine. That’s the state of some of the key state-run financial institutions, viz., LIC of India, UTI, SAT, GIC, IRDA, New India Assurance, etc. that are without full-time chief executives, including two where millions of Indians invest their hard-earned money. The state of the government, blamed for policy paralysis, is affecting these vital institutions built over decades, which serve public interest.
Institutions such as Life Insurance Corporation and UTI are trusted household names, and dithering over key appointments in such organisations could send wrong signals apart from affecting their operations. Appointments in the government are an elaborate process, but it is supposed to start on time and ensure that decision-making does not suffer. The absence of chief executives, in some cases fulltime ones, is hurting. This, at a time when the economy is becoming strained, forcing companies to come up with their own solutions. Most of the institutions are stable at this point of time. But leaving these institutions headless may result in certain important decisions getting postponed, which can cause damage in the long term. Indecision can lead to these companies ceding ground to nimble private sector rivals, who are out to capitalise on such opportunities. These are not institutions where investors are looking for quarterly earnings that could keep the management on its toes, but closed ones whose financials are not even known or scrutinised. The absence of key personnel at the regulator may not look as problematic as it is with corporations, but they are vital for markets just as much.
