Punjab to bring one-time settlement policy for sick units

The policy would provide the much-needed relief to those industrial units that raised loans from state-level financial institutions

The Punjab government will introduce one-time settlement (OTS) policy in the state, with a view to bring the blocked industrial investment into productive use and to revive the state industry.

The policy would provide the much-needed relief to those industrial units that raised loans from the state-level financial institutions such as Punjab State Industrial Development Corporation (PSIDC), Punjab Financial Corporation (PFC) and Punjab Agro Industries Corporation (PAIC) but had gone into losses, either because of recession or poor demand.

"The recent economic downturn also affected our industry adversely and many borrowers PSIDC, PFC, PAIC are facing genuine difficulty in repaying their loans," state Finance Minister Parminder Singh Dhindsa had said in Assembly while presenting the state Budget.

He added, "Under the policy, besides hundreds of small-scale industrial units, 60 large- and medium-scale industrial projects as well as 15 industrial projects of PAIC are likely to get revived and PFC, PSIDC and PAIC are expected to effect recovery of significant public money."

A senior official in the industry department said this was an effort to give relief to sick units and revive them. Under the scheme, the state-level financial institutions would rehabilitate the sick units through OTS. "We are working on the modalities and soon we will introduce the policy," he said.

Earlier, PFC waived off loans of 782 units under the OTS scheme and settled Rs 900 crore on account of interest and penal interest during January 1, 2010 to December 31, 2014.

The PSIDC is an institutional promoter, the organisation's aim is to promote infrastructure and industrial development in the state wherein it had invested in the equity in the various public, joint, assisted and private sector units.

PFC is an institution of state which was incorporated to perform the role of a development bank in the state. The corporation was established with an objective of granting loans to establish new industrial concerns, modernisation and expansion/diversification of existing activities, among others.

PAIC is entrusted with the responsibility of promotion and facilitation of agro-based industries, including agro-processing, dairy processing and poultry processing, agro residue processing, food & horticulture processing and agro chemicals manufacturing.