PSEs perform below expectation in 12-13

Turnover falls to 5%, profit drops to 2% YoY

Close on the heels of weak economic climate in the country, the performance of public sector enterprises (PSEs) in the country for 2012-13 showed a mere 5 per cent growth in turnover and a 2 per cent in profit year-on-year, according to a performance report prepared by the Heavy Industries and Public Enterprises ministry.

Comparatively, this was way below the 23 per cent growth in turnover and 10 per cent in profit by PSEs in 2011-12 annually. The latest report, 2012-13, has been compiled and would soon be released by the ministry. Such reports are placed in Parliament for observation by the elected representatives.

“The poor performance might have been due to the weak business climate (both domestic and global) and pending projects, which were awaiting clearances, among others,” said OP Rawat, secretary, public enterprises, Ministry of Heavy Industries and Public Enterprises.

“However, going by the half-yearly results of PSEs, I’m confident they would see around 15 per cent growth in turnover in 2013-14,” he added.

He said projects totaling Rs 300,000-crore, including PSEs, have been cleared by the Cabinet Committee on Investments (CCI) since its formation in December 2012.

To fast track big ticket infrastructure projects and to boostthe slowing economy, the CCI was formed by the Union government, headed by Prime Minister Manmohan Singh.

The ministry is also looking at revisiting the Navratna and Maharatna PSE guidelines. As of now, for investments over Rs 5,400-crore, Maharatna PSEs have to obtain the nod of the Union Cabinet.

Besides in January, the ministry is holding a consultative meet of all PSE CSR heads on issues related to corporate social responsibility (CSR) and sustainable system. It had so far held five such meetings. It has also sought exemption from Section 155, 462 of the Companies Act, 2013, over the clauses related to CSR spending.

“We had requested the Ministry of Company Affairs to exempt PSEs as our CSR programme is quite robust compared with the ministry's compulsory average 2 per cent of annual profits,” said Rawat, while speaking at the golden jubilee lecture of Institute Of Public Enterprise (IPE) here.

According to him, PSE CSR programme committed for an average 5 per cent CSR spending every year. “In fact, we had suggested PSEs to leverage their managerial experience skills to identify gaps in central welfare schemes and make them very effective in the long-run,” he added.

Speaking at the event — 21st Century Challenges to Public Enterprises in India, P Rama Rao, president, board of governors of IPE, said the CSR funds of PSEs could be utilised for setting up centres of excellence in R&D and educational institutes.