Few More PSUs on Verge of Closure, Centre Wants to Remain as Facilitator Only

Arvind Panagariya, Vice-Chairman, Niti Aayog, classified the list into two segments. One section of the list for closure of PSUs and the other one comprising the PSUs, in which the Centre will dilute its stake. - Sakshi Post

New Delhi: As part of the disinvestment exercise, the Centre is exploring ways to close down few more public sector units (PSUs). The Centre has almost decided to shut 15 PSUs and Cabinet already okayed the proposal on closure of five units. Niti Aayog submitted a report on closure, revival and sale of 74 sick and unprofitable PSUs in June 2016. Now, Finance Ministry is working on it.

The Finance Ministry is also working on capital restructuring or even land banks and strategic sale. PSUs will have to follow it up as the government wants to confine itself as a facilitator.

After discussing with ministries concerned, Nripendra Misra, Principal Secretary at PMO, held meetings with all the ministries. Subsequently, the PMO has decided to close 15 PSUs. Niti Aayog classified the list into two segments. One section of the list for closure of PSUs and the other one comprising the PSUs, in which the Centre will dilute its stake.

Niti Aayog has identified six more PSUs and the proposal is drawing flak from the opposition parties and some ministries as well.
For instance, Petroleum Ministry is opposing the closure of Bio Fuel Ltd, a part of HPCL. Union Textile Ministry has also taken up the issue of closure proposal on British India Corporation and Elgin Mills to the Prime Minister’s Office (PMO).

Heavy Industries Ministry has already cleared a proposal on closing down the loss making units of HMT. Shipping Ministry has also agreed for the closure of Central Inland Transport Corporation. The Centre is seeking opinions and views from ministries concerned regarding the closure of PSUs.

On the other hand, Arvind Panagariya, Vice-Chairman, Niti Aayog feels that the Centre need not wait for the last part of its disinvestment report to come out and can take up the PSUs identified in its report on closure and restructuring of loss-making public sector units.

Petroleum Ministry is opposing the closure of Bio Fuel Ltd, a part of HPCL. Union Textile Ministry has also taken up the issue of closure proposal on British India Corporation and Elgin Mills to the Prime Minister’s Office (PMO).Heavy Industries Ministry has already cleared a proposal on closing down the loss making units of HMT. Shipping Ministry has also agreed for the closure of Central Inland Transport Corporation. The Centre is seeking opinions and views from ministries concerned regarding the closure of PSUs.  

Niti Aayog said if strategic sales is taking time, then assets of loss-making PSUs can at least be put in the land bank and auctioned off. Under work is the process to set up land banks of all holdings with PSUs, autonomous bodies and the Centre.
The Urban Development Ministry is understood to be developing an online portal for the purpose. Ministries and PSUs have been asked to survey the land available with them.

The Finance Ministry is also working on capital restructuring or even land banks and strategic sale. PSUs will have to follow it up as the government wants to confine itself as a facilitator.

With the first half of the financial year drawing to a close, the Centre has till now approved the winding up of only one PSU, Hindustan Diamond Company. The Cabinet Committee on Economic Affairs on September 21 approved it.

The Department of Public Enterprises in August issued norms for time-bound closure of PSUs, while the Finance Ministry already announced norms on capital restructuring in state-run firms through methods such as stock split and share buyback.
The NDA government has set a target in Budget 2016-17 raising Rs 56,500 crore from disinvestment, of which, Rs36,500 crore is expected from minority stake sales and Rs20,500 crore from strategic sales.

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