Govt to provide a lifeline for ailing PSUs

NEW DELHI: Never mind the resource crunch and assertions by government managers that not a single investable rupee will be wasted; the government is all set to play Santa Claus for loss-making public sector companies.

The heavy industries ministry plans to recommend munificence from the Centre for 17 of its 37 loss-making PSUs. Many of these had got approval from the previous government to be disinvested.

The recommendations are to be made to the Board for Reconstruction of Public Sector Enterprises that is being set up under the heavy industries ministry. The PMO had recently asked the ministry to submit a note in consultation with other ministries like coal, petroleum and fertilisers on issues relating to the formation of the board.

While secretary level discussions are on to frame policy guidelines for the board, the heavy industries ministry has already decided to recommend 17 PSUs for a fresh lease of life.

The ministry has identified seven PSUs for shutdown, in addition to eight that were closed by the Vajpayee government. It has identified nine companies as profit making ones.

Among those companies that will be eligible for capital infusion are Kolkata-based Andrew Yule and Burn Standard and the Vishakapatnam-based Bharat Heavy Plate and Vessels.

Others who fit the bill are Cement Corporation of India, Tyre Corporation of India, Heavy Engineering Corporation and HMT Watches and four of its subsidiaries.

A separate decision has also been taken to revive four other companies that fall in the same bracket — two units of Bharat Wagon Engineering in Bihar and Braithwaite in West Bengal. The choice of PSUs clearly indicates that political compulsions played a significant role in the ministry’s recommendations.

The decision on Bharat Wagon and Braithwaite, sources said, was directly taken by the PMO just before Prime Minister Manmohan Singh’s US visit, following pressure from the RJD and Left parties.

The PSUs which are lined up for closure include National Instruments and Hindustan Photofilms.