Restructuring Package For 49 Psus Finalised

Speaking at the Economic Editors Conference, Union industry minister Murosali Maran said the proposal, which has been sent to the concerned ministries for comments, will soon be referred to the cabinet for clearance.

Outlining the governments gameplan, the minister said the cabinet note envisaged a four-tier structure for PSUs with profit making PSUs at the top and the loss-making ones at the bottom rung.

The cabinet note specifically identified 10 profit making PSUs that can be developed into global players.

The ministry favours the joint venture route for the development of these PSUs as international giants.

The sole exception is BHEL, where the government is averse to surrendering control.

 

The ministry favours the setting up of a revolving fund to revive sick PSUs.

The corpus for this fund will be created by apportioning 10 per cent of the governments divestment proceeds, the minister said.

The industry ministrys cabinet note also detailed those PSUs in which the government will consider total withdrawal.

In case of potentially sick PSUs, however, the ministry may consider a revival through workers participation in management.

A case in point is HEC which is at present being turned around.

The monthly productions now touches Rs 22 crore, just Rs 8 crore short of the breakeven point.

The workforce has also been slashed from 18,500 five years ago to 11,000 now.

The proposal also provided for a revamped voluntary retirement scheme, where the emphasis was on making voluntary retirement attractive to exiting employees while minimising social distress.

Pointing out that the governments approach to PSU restructuring had till now been just a revenue raising exercise, the minister said there is currently a shift in approach in terms of inviting workers participation in the reforms process.

The minister stated of 34 of the 49 PSUs under the industry ministry were loss making enterprises.

Of the lossing making units, 25 had become sick and had been referred to the Board for Industrial & Financial Reconstruction (BIFR). Eight revival packages have already been cleared by the cabinet and the rest are expected to be cleared soon.

Asked whether the government is trying to revivie the loss making units to make them attractive from the disinvestment point of view, the minister said window dressing to make PSUs shares attractive to investors could not be ruled out.