Punjab plans settlement scheme for sick industrial units

The Punjab government is contemplating to introduce one time settlement (OTS) for rehabilitating the sick industrial units in the state. The decision would provide much needed relief to those industrial units that had raised loans from the Punjab State Industrial Development Corporation (PSIDC), Punjab Agro Industries Corporation (PAIC) and Punjab Financial Corporation (PFC) but had gone into losses either because of recession or poor demand.

According to Industry department, there are around 250 cases which would be eligible for availing the OTS scheme. This will be sixth OTS scheme since 2001, launched by the state government in order to recover the dues of the three corporations.

A senior official in the Industry department mentioned that this was an effort to give relief to sick units and revive them and probably will be last OTS offered by the state government. He said, " The proposal is at discussion stage where the terms of OTS is yet to finalised. After the finalisation of the terms it would be sent to the cabinet for approval." Under the scheme the state level financial institutions like PSIDC, PAIC and PFC would rehabilitate the sick units through OTS.

The total outstanding loan amount of these three corporation is at Rs 3,300 crore and Rs 1,600 crore in terms of equity. The government has also plans to introduce the OTS scheme for equity settlement.

The PSIDC is an institutional promoter. Its website states that the organisation's aim is to promote infrastructure and industrial development in Punjab in Punjab wherein it had invested in the equity in the various public,joint, assisted and private sector units, hence, it is making efforts to enforce the purchase of shares by the private collaborators. In this endeavour it has invoked all legal remedies including arbitration for recovery of the amount against buy back of shares by the promoters.

In 2009, it had notified OTS Scheme for equity which was further extended few times and finally upto February 16, 2011. The corporation has recovered Rs 51.91 crores upto March 31, 2013 under OTS. In addition, Punjab Alkalies & Chemicals Ltd., a public sector undertaking (PSU) company in which the corporation's equity stake is 44.26 per cent is also planning to dis invest through the Directorate of Public Enterprises & Disinvestment.