Bailout Package For Defaulting Psus

The government is likely to provide a one-time budgetary support to public sector companies, which are unable to clear their statutory dues and wage payments on their own. The bail-out will, however, be subject to a number of conditions including a Cabinet-approved revival or closure plan as demanded by the finance ministry.

The 73 public sector undertakings, primarily under the textiles, heavy industries or steel ministries, that have not cleared their salaries and wages, or not made the mandatory provisioning for expenses like gratuity, will be reclassified and those making profits will have to clear their dues on their own. The list includes a clutch of profit making companies like Bharat Heavy Electricals Ltd and National Aluminium Company Ltd.

The loss-making companies would have to meet their obligations out of operating surpluses or through disposal of assets, failing which their administrative ministry would be allowed to approach the Cabinet Committee on Economic Affairs (CCEA) for approval of a revival or closure plan, a government official said after a meeting of the Group of Ministers on statutory dues, salaries and wages.

The overall dues of these 73 companies amount to about Rs 2,070 crore. The GoM will meet again after six months to finalised a list of companies which will be eligible for budgetary support after CCEA takes a decision on their future.