The present government has created several Special Purpose Vehicles (SPVs) to achieve specific goals in key policy areas.
How successful are the SPVs?
The idea of SPVs is to create a hybrid of a government-controlled body along with the efficiency and agility of the private sector.
There are many companies that are vested with specific tasks.
e.g Energy Efficiency Services Ltd, Invest India Ltd, SECI, NSDC and the recently-formed Digital India Corporation etc.
Going by the numbers, all have performed very well.
Invest India - In Invest India the government owns 49% of it, so technically it is not a PSU.
Its aim is not to make money for the shareholders, but to facilitate investments into India, hand-hold investors through the bureaucratic maze.
In 18 months, the company has handled over 70,000 investor queries, brought in over $62 billion of investment commitments, of which around 4.5 billion have been made.
Invest India has direct access to the PMO, which helps in cutting red-tape.
Energy Efficiency Services Ltd - It is a for-profit company.
It is expected to make money for its shareholders, who are four power sector PSUs — NTPC, PGCIL, PFC and REC.
EESL’s mandate is to pull out the energy inefficient electrical gadgets in use (such as incandescent bulbs) and replace them with energy efficient ones (such as LEDs).
It is profitable through a model that lets the customer pay for the costlier replacements out of their savings in energy bills.
But more than profits, its efforts have helped avoid 6 GW of peak time power, save 30 billion units of electricity, worth Rs 12,000 crore, annually (so far).
The secret of its success is functional independence.
Solar Energy Corporation of India - The present administration converted SECI from a not-for-profit ‘Section 25 company’ into a ‘Section 3 company’ (in the new Companies Act) which is allowed to engage in commercial activity.
That made SECI to actively float tenders for solar plants and of wind power capacity.
In the last two years, SECI has been involved in over 5,000 MW of solar and wind capacity.
In 2015-16, it made a post-tax profit of Rs 20 crore.
National Skill Development Corporation - NSDC is 51% owned by industry bodies.
In spite of criticisms about the low hit-rate in placements it has trained 1.15 crore people in 7,000-odd training centres.
The lesson is from all of the above is simple.
They have delivered results by adopting an innovative management model and operational freedom.
