The role of state-owned enterprises (SOEs) in India has to be seen in the historical context. They have played an important role in the country’s development. The Memorandum of Understanding (MoU) system introduced in these enterprises has gone beyond the original objective of grant of greater autonomy. While it has become a tool in strategic management today, it is riddled with some inadequacies that need to be removed. The article argues that a reformed MoU system will go a long way in enhancing the contribution of these enterprises to India’s GDP.
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