Industry

PMO nod for closure of sick govt. companies

NITI Aayog’s proposal for shutting down 17 sick or loss-making units has been cleared.

The BJP-led NDA government is all set to embark on its strategic disinvestment programme. NITI Aayog’s proposal for shutting down 17 sick or loss-making government companies has received the go-ahead from Prime Minister’s Office (PMO). A second set of proposals from the Aayog for strategic sales aimed at reducing government ownership to below 51 per cent in about 22 public sector companies has also got the green signal from the PMO.

This second list includes the Miniratna helicopter services operator Pawan Hans Limited, Scooters India Limited, Cement Corporation of India Limited and three plants of the Maharatna Steel Authority of India (SAIL) located at Salem, Durgapur and Bhadravati. Government companies in the hospital services business and the construction consultancy industry are also on the list of PSUs for strategic disinvestment. “The approval from the PMO is not for outright 100 per cent sales…the government won’t exit these companies, but will go on to be a minority shareholder post disinvestment,” said an official.

The Finance Ministry is approaching the Cabinet for its approval separately for each of the strategic sales the PMO has approved. It expects minimum resistance as the administrative ministries were brought on board.

The list of loss-making companies to be closed includes Indian Oil-CREDA Biofuels Ltd and CREDA HPCL Biofuel Ltd, both Jatropha oil-focussed subsidiaries of state-owned petroleum giants.

Also on the list are National Jute Manufactures Corporation Limited and its subsidiary, Birds Jute & Export. Bharat Wagon and Engineering is another public sector unit (PSU) that is all set to be shut down.

Before these PSUs are shut down, the Centre will offer voluntary retirement to their employees.

Land assets

Many of the companies being shut down hold vast tracts of land. For instance, CREDA HPCL Biofuel had leased 15000 hectares of vacant waste/barren land from the government of Chhattisgarh for a period of 30 years for planting jatropha. Such land that had been leased from State governments could be returned with or without a price.

Free-hold land parcels could either be passed on to the Centre or be auctioned to pubic or private sector bidders.

The administrative ministries of these PSUs will seek approvals of the Cabinet Committee on Economic Affairs for each of these cases.

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