Centre likely to revise guidelines for shutting loss-making PSUs

The Centre is likely to announce revised guidelines for time-bound closure of loss-making central public sector enterprises (CPSEs) and their asset disposal during February 1 Budget presentation, according to reports.

The Department of Public Enterprises (DPE) had prepared a draft cabinet on the revised guidelines in July last year and a revised note was circulated based on suggestions from the Prime Minister’s office, following which a final note has been prepared, Mint quoted an official as saying.

The official said the new guidelines are likely to give priority to closing loss-making units that couldn’t be privatised by strategic disinvestment. The report said that attempts to find strategic investors for Bharat Pumps and Compressors and Scooters India Ltd. have failed.

Current guidelines stipulate a monitoring committee in NITI Aayog, which the government approaches when problems arise during the sale of immovable assets when a CPSE is being closed down.

There are around 70 loss-making CPSEs in the country which have incurred losses worth ₹31,635 crore to the exchequer in FY19, according to the data submitted in Lok Sabha by Union Minister Prakash Javadekar on March 17 last year.

The government has nod to the closure of 21 loss-making CPSEs during August 2013-March 2020, the report said. Besides, it has also approved plans to revive eight CPSEs, which includes Brahmaputra Valley Fertiliser Corp. Lrd and Mahanagar Telecom Nigam Ltd.

According to Javadekar, some common problems faced by the loss-making CPSEs include obsolete plants and machinery, heavy interest burden, resource crunch, low capacity utilization, low productivity, surplus manpower, high input cost, non-remunerative prices etc, the report said.