Review of the MoU System/ Guidelines for
Central Public Sector Enterprises
The Government of India had introduced the system of Memorandum of Understanding (MoU) in 1986 which is a mutually negotiated agreement between Central Public Sector Enterprises (CPSEs) and its Administrative Ministries/Departments. Giving this information in written reply to a question in Lok Sabha today, Shri Praful Patel, Minister of Heavy Industries and Public Enterprises said that MoU is prepared by the CPSEs on the basis of MoU Guidelines which is issued by Department of Public Enterprises annually after taking into consideration the suggestions received from the Task Force and Consultants/ Working Group formulated from time to time.
The Last Working Group was formulated on 23rd May, 2012 headed by Shri P. G. Mankad, (Chairman, Task Force) to review the MoU System/ Guidelines for CPSEs. It consisted of members having vast exposure/experience and included ex-bureaucrats, ex CMD of CPSEs, finance expert and academician.
The terms of Reference of the Working Group ( Committee) were as under:
I. Examine the desirability/possibility of different MoU Formats for different sizes and categories of CPSEs including Maharatna/Navratna.
II. Examine the issue of the desirability/need for all CPSEs to be covered by the MoU exercise, especially in its current format and process which is common to all CPSEs.
III. Examine the current system of setting targets on five point scale.
IV. Examine the issues arising out of the Results Framework Document (RFD) System of the Ministry/Department.
V. Look into the aspects of giving more operational flexibility to CPSEs/administrative Ministry and the Task Force on MoU in the matter of target setting and performance evaluation.
VI. Look into organizational and other measures to strengthen the Task Force.
VII. Look into any other matter of relevance that the Working Group and the Department may consider appropriate for the empowerment and enhancement of CPSEs especially in the context of their role in the economy and to make the MoU exercise more effective.
Working Group has submitted its report on 22.10.2012, the Minister informed the House.
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KKP