Is the Congress-led United Progressive Alliance government for or against closure of loss-making public sector units?
Highly placed sources say that considering a list of chronically ill PSUs that the Congress and its closest associates have prepared, it would seem that the government is totally for the closure of such 'hopeless' PSUs.
The list is apparently known to Finance Minister P Chidambaram, Heavy Industries Minister Santosh Mohan Deo, and Law Minister Hansraj Bharadwaj.
With the controversial issue of the nomination of foreign consultants on the Planning Commission committees creating tension between the Congress and the Left parties, this new matter might soon develop into a very serious headache for the Manmohan Singh-led UPA government.
The government is said to have prepared a list of 21 PSUs that are losing money endlessly.
Seven of these are said to be beyond salvage:
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Bharat Opthalmic Glass Ltd
- Heavy Engineering Corporation
- Hindustan Cables Ltd
- Hindustan Photo Films Manufacturing Company Limited
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National Instruments Ltd
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Triveni Structurals Limited.
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Tungabhadra Steel Products Ltd.
These are likely to be put on the chopping block.
Eleven other PSUs unlikely to get oxygen in the form of fresh infusion of funds are:
- Bharat Heavy Plates and Vessels
- Bharat Leather Corporation
- Bharat Process and Mechanical Engineers Ltd
- Cycle Corporation of India Ltd
- Mining and Allied Machinery Ltd
- National Bicycle Corporation of India
- National Industrial Development Corporation Ltd
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RBL Ltd
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Rehabilitation Industries Corporation Ltd
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Tannery and Footwear Corporation of India Ltd
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Weighbridge India Ltd.
The remaining three might have some future if viable joint ventures are worked out for them. These are Bharat Pumps and Compressors Ltd; Bharat Wagon and Engineering Ltd; and Braithwaite and Co Ltd.
The Manmohan Singh government has already proposed the constitution of a new Board for Reconstruction of Public Sector Enterprises in place of the erstwhile Divestment Commission.
About 240 PSUs, including the above-mentioned 21 PSUs, will be under the board's domain. The board will take a decision over the autonomy to be given to the profit-making PSUs and disbanding of some of the seriously loss-making ones.
With the Left breathing down its neck, the government is trying to keep this list a 'secret.' Especially since the Leftists have launched a vitriolic against Planning Commission Deputy Chairman Montek Singh Ahluwalia and, to some extent, Finance Minister P Chidambaram.
However, highly placed mandarins in the current government say that the Singh government is determined not to waste money in continuing to keep some of the very sick units alive.
A source suggested that the government will be ' slow, but firm' over this issue.
For strategic reasons the Cement Corporation of India Limited, Jammu & Kashmir-based HMT Chinar Watch Ltd, and the Nagaland Pulp and Paper Ltd will remain untouched.
But the matter is not related only to economics. It is a highly political issue too. Sonia Gandhi had recently written to the prime minister stating that "the first item in the terms of reference of the new Board for Reconstruction of Public Sector Enterprises should be such as to enable it to look into ways and means for strengthening public sector enterprises, in general, and making them more autonomous and professional."
She stressed that "the functioning of the board should not be limited only to restructuring or advising on the closure or sale of public sector enterprises that are referred to it by the government."
In view of this, babus of the concerned departments have included in the list some companies that 'deserve' autonomy.
The PSUs that are thought to be worthy of freedom are: Bharat Heavy Electricals Limited
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Engineering Projects Ltd
- Hindustan Newsprint Ltd
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Hindustan Paper Ltd, and
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Rajasthan Electronics and Instrumentation Ltd.
The PSUs listed for restructuring and sustained support include:
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Braithwaite Burn & Jessop Construction Company Ltd
- Hindustan Machines Tools International Ltd
- Hooghly Printing Ltd, and
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Scooters India Ltd.
The government is aware of the hue and cry that the Left parties will raise over the list once it is placed in public domain for debate.
Sources say that the government is likely to refer to a paragraph in the National Common Minimum Programme as a defence to its move. The said para says: "While every effort will be made to modernise and restructure sick public sector companies and revive sick industry, chronically loss-making companies will either be sold off, or closed, after all workers have got their legitimate dues and compensation."
