The government is putting in place a policy for sale of assets, including surplus land, of loss-making public-sector companies to help mobilise resources for their revival.
Heavy industries ministry officials said the public-sector undertakings which had idle capacity, resources or assets could raise funds to expand production and sales without additional capital infusion by the government.
"Assets like surplus land, for example, which do not affect the production of the PSUs can be liquidated," said a government official.
After clearing statutory dues worth Rs 517 crore (Rs 5.17 billion), the government has demanded corresponding letters of commitment from the 24 beneficiary PSUs stating that they must consider disposing of surplus and non-core assets.
Most PSUs that have huge plots, invariably operate on lands which are on lease from the state governments.
For example, the Heavy Engineering Corporation Ltd. has over 8,000 acres of land, of which nearly 3,000 acres are on lease from the Jharkhand government, an official said.
Since the prerogative of selling the land did not rest with the PSUs, the Centre will have to enter into agreements with state governments.
"In case the modalities of financing these debts are not feasible, the other option will be to write off the dues of the PSUs," an official said.
But states may not agree to the proposal easily and put in demands to ensure that a part of the proceeds from the sale of assets was invested with the state.
For instance, the erstwhile Chandrababu Naidu regime in Andhra Pradesh had demanded that the proceeds from PSUs should be reinvested within the same state, an official said.
As a fallout of the austerity measures announced last fortnight, sick PSUs may have to match profit-making companies by selling surplus land, he added.
The government had asked profit-making PSUs to declare a minimum dividend on equity of 20 per cent or a minimum dividend payout of 20 per cent of post-tax profits, whichever was higher.