A working group comprising public and private sector banks, other financial institutions and the Public Sector Restructuring and Internal Audit Board (RIAB) has been formed for drafting a workable plan to provide working capital and long-term funding to State PSUs.
Members include Canara Bank, State Bank of India, Federal Bank, Punjab National Bank, HDFC Bank, Kerala Bank, Kerala Financial Corporation (KFC), Kerala State Industrial Development Corporation (KSIDC) and Small Industries Development Bank of India (SIDBI). The Member Secretary, RIAB, is convener of the panel.
The working group has been asked to submit its report to Industries Minister P. Rajeeve by February 15.
The panel was formed at a meeting convened by Mr. Rajeeve to secure financial support from banks and other financial institutions for implementing the masterplan formulated for the modernisation, expansion and diversification of PSUs.
The working group will have its first meeting on Tuesday.
According to the Industries Department, the PSU masterplan envisions 405 projects including 175 short-term and 230 long-term ones estimated at ₹8,741.6 crore. The required borrowing for short-term projects is pegged at ₹645 crore. The department has pegged the immediate working capital requirement at ₹747 crore.
Mr. Rajeeve called for a ‘‘different’‘ and ‘‘practical’‘ approach from the banks in supporting PSUs. The turnover of PSUs has increased by 43% during the past six years from ₹2,724 crore in 2016-17 to ₹3,892 crore in 2021-22. Twenty-one companies recorded an operating profit during 2021-22, he said.
Project-based working capital to PSUs under an escrow mechanism, management of the debt and rating of the units, government guarantee for enhancing credit limits were discussed at Thursday’s meeting.
Eyeing public sector transformation, the Industries Department had classified PSUs into seven sectors with masterplans for short, mid and long-term development. The department has announced measures including autonomy, appointment of independent expert directors, formation of Kerala Public Enterprise Selection and Recruitment Board, and a Cotton Board for procuring cotton for textile mills.
Representatives of banks, Principal Secretary (Industries) A.P.M. Mohammed Haneesh, RIAB chairman R. Ashok, member secretary K. Padmakumar, Advisor (Masterplan) Roy Kurian K. K., were present.