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Government to shut down 15 loss-making public sector undertakings

The Centre has decided to shut down 15 non-performing and loss-making public sector undertakings (PSUs) under its administrative control.

India TV Business Desk, New Delhi [ Published on: September 27, 2016 12:31 IST ]
NITI Aayog
NITI Aayog

The Centre has decided to shut down 15 non-performing and loss-making public sector undertakings (PSUs) under its administrative control.

According to a report in Times of India, the Union Cabinet has given its nod to close down at lease five PSUs while adopting a policy to revive three state-run enterprises. 

The policy options include closure of companies, followed by sale of assets, transfer of ownership of some of them to states and revival of those undertakings that serve a public purpose.

Quoting sources, the report mentioned that the NITI Aayog has indentified six more ‘sick’ PSUs but their fate remained uncertain with ministers lobbying to keep them alive.

The PSUs with a backing from ministers include HPCL Biofuels, British India Corporation and Elgin Mills. While the Ministry of Petroleum & Natural Gas has opposed shutting down of ailing HPCL Biofuels, the Textiles Ministry has managed to raise the issue of two others with PMO and thus stalling any immediate proposal to close down the companies.

Besides, three pharmaceuticals PSUs have been referred to a panel of ministers for consideration. 

Hindustan Antibiotics Ltd, which was also on the list for the closure of sick government companies, was referred to Union Cabinet appointed Group of Ministers under Finance Minister Arun Jaitley. The Pune-based drug maker holds several acres of land in Mumbai and Delhi.

There are also few ministries that successfully piloted proposals to shut down loss-making houses under its control. 

The Heavy Industry Ministry, earlier this year, managed to get government’s approval to its proposal to shut down some HMT arms. The Union Cabinet, while approving the closure of the iconic HMT Watches, had offered a voluntary retirement scheme (VRS) to its employees as per the 2007 pay scales.

Likewise, the Shipping Ministry is working on getting the Cabinet’s green signal to shut down Central Inland Water Transport Corporation.

Earlier this year, the NITI Aayog had submitted recommendations to Prime Minister Narendra Modi on what the government’s policy should be for the 74 central PSUs that have turned sick or are making a loss (of the total 235 that are operational).

“The winding up of (some of) these units, out of 74 loss-making PSUs identified by the NITI Aayog for closure or sell off, has received a go-ahead from PMO,” an official privy to the development told TOI.

The official added that list was finalised after several rounds of consultation held by Nripendra Misra, Principal Secretary to PM Modi, who has been involved with the exercise, with respective ministries.

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