PMO to oversee plan to reform central public sector enterprises

NEW DELHI: The government is planning to give a push to expenditure plans of central public sector enterprises and help them better utilise their surplus reserves as part of a strategy to reform the companies.

The exercise is being overseen by the Prime Minister’s Office and includes drawing up of a plan for sick companies, officials said. Under this plan, sick companies are being put in three separate baskets, they said.

"The administrative ministries will classify their firms as weak, sick or incipient sick. Accordingly, they will put in place a restructuring plan which may include divestment, privatisation or closure options for sick and incipient sick firms," said an official with the Department of Public Enterprises, requesting not to be identified. The ministries concerned will present the revival plan for such firms within nine months of the closure of the financial year, the official said.

The government has also asked state-run firms to share details of issues they are facing in their projects which could derail their capex plans. Monopoly miner Coal India recently said its capital expenditure plan of Rs 60,000 crore over the next five years may get hit because of the increase in the cost of land acquisition.

"The PMO is actively looking at it and has assured full support to resolve such issues," said another official.

Later this week, the PMO will hold a meeting with the state-run firms to discuss issues pertaining to land alienation, he said. "We want to work out a mechanism where the land bank is best utilised and the state governments are on board," the official said. In some cases the land available with loss-making firms is on lease given by the respective state governments, he said.

Last month, finance minister Arun Jaitley reviewed projects and investment plans of about 32 state-run companies. Public sector units currently have a combined cash surplus of over Rs 2 lakh crore.