Govt Plans To Convert 23 Heavy Psus Into Joint Venture Firms

The government has decided to convert 23 out of the 48 public sector entrprises (PSEs) under the department of heavy industry into joint venture companies.

Also, in keeping with finance minister's promise in the Budget speech, it has sought cabinet approval to provide additional benefits equivalent to those available under the VRS to employees of PSEs facing closure.

Such employees are otherwise only entitled to retrenchment compensation under the Industrial Disputes Act.

This was disclosed by the industry minister Sikander Bakht at the meeting of the consultative committee attached to the ministry of industry.

According to the minister, the government has worked out a comprehensive strategy to improve the performance of 48 PSEs under the department of heavy industry.

 

The strategy will include measures to revive viable PSEs referred to the BIFR, financial restructuring wherever appropriate, strengthening and professionalisation of boards and management, and formation of joint ventures by induction of partners capable of providing technical, financial and marketing inputs.

The government has already given its approval for converting 23 of the 48 PSEs into joint venture companies.

The strategy is to revive these companies so that they would not depend on budgetary support but would be able to sustain their viability on a long-term basis. Efforts are already on to locate suitable joint venture partners.

Also, out of the 23 PSEs registered with the BIFR, revival plans are being implemented in nine such units where government has promised fresh capital infusion of Rs 382 crore and financial restructuring to the extent of Rs 1,535 crore.

In the case of nine other PSEs, BIFR had recommended closure as these units were found to be unviable.

The minsitry is also seeking cabinet approval to extend additional VRS benefits to the employees to these units.

Under the existing policy, employees of sick companies facing closure were not entitled to get benefits under VRS.

They are only entitled to retrenchment compensation. However, to mitigate the hardships of workers and also to save unproductive expenditure on idle wages, cabinet approval has been sought for providing benefits equivalent to those available under VRS to employees of such PSEs, the minister said.