The heavy industry department has estimated that it will require around Rs 9,000 crore (Rs 90 billion) for the revival of 27 ailing public sector companies. The cost will, however, come down if the Left agrees to the closure of seven chronically sick companies.
The chronically sick companies facing closure include Hindustan Cables Ltd, Richardson & Cruddas, Hindustan Photofilms, Triveni Structurals Ltd, Tungabhadra Steel, Bharat Opthalmic Glass Ltd and National Instruments Ltd.
These PSUs together have a negative networth of around Rs 4,500 crore (Rs 45 billion). An effort to turn them around will mean putting in over Rs 2,000 crore (Rs 20 billion) for the revival of these companies.
On Friday, the Communist Party of India (Marxist) said it was willing to discuss the closure of some PSUs if the government came forward with a list.
"The cost of revival is being worked out. The estimated total cost of revival may be less, if the government decides to shut down some PSUs," said an official in the heavy industry ministry.
Earlier this month, in its quarterly performance review, the heavy industry department had conducted a preliminary exercise where the revival cost was estimated at Rs 9,000 crore.
Officials said the government would have to provide money for revival since it would have to bear the burden of waiver of interests and even the principal amount of outstanding loans, penalties and taxes.
There were concerns as the banks and financial institutions were reluctant to repeatedly bail out loss-making PSUs, they added.
The Budget had provided a token Plan support of Rs 1 crore (Rs 10 million) for the revival of PSUs during the current financial year. More funds would be made available under this head as and when monies were required, officials said.
Last week the Cabinet cleared a Rs 100-crore (Rs 1 billion) revival scheme for Bridge & Roof Co., which would be added to the the Centre's Budget.
In the outcome budget, the finance ministry had suggested that the revival scheme should be funded out of the existing non-Plan budget of Rs 400 crore (Rs 4 billion).
Of this, Rs 140 crore (Rs 1.40 billion) were released for the payment of statutory dues of 15 PSUs in May. Heavy industry department officials said the non-plan budget was limited since it would have to pay statutory dues of sick PSEs.
