1. Narendra Modi government set to shut down 5 sick PSUs, PEC, Bharat Wagon, Elgin Mills on list

Narendra Modi government set to shut down 5 sick PSUs, PEC, Bharat Wagon, Elgin Mills on list

With this, 21 units to be under liquidation; these together reported Rs 5,600-cr loss in FY16 alone.

By: | New Delhi | Published: June 21, 2017 8:07 AM
sick PSUs, PEC, Bharat Wagon, Elgin Mills Besides closure of sick units, the Cabinet gave an in-principle approval in October last year of about 20 PSUs (profitable as well as loss-making) for strategic sale. (Reuters)

While strategic sale of profit-making and sick PSUs are yet to gather pace, the Cabinet will likely give its nod for the closure of five more ailing PSUs including PEC and Bharat Wagon & Engineering soon, accelerating the process of dispensing with the firms that are a constant drain on the exchequer.

PEC, formerly Project and Equipment Corporation of India, is an export-import unit under commerce ministry; it incurred a loss of Rs 1,142 crore in FY16, while Andaman & Nicobar Forest Plant Development Corporation, another PSU identified for closure, suffered a loss of Rs 49 crore in the year.

The accumulated losses of these five units are many times their losses in FY16. Out of the 16 units, which were approved for closure by the Cabinet in last 9-10 months, four including Hindustan Photo Films and Tyre Corporation of India are already under liquidation, while the remaining are at various stages of a time-bound closure programme.

Among the 6,588 employees of the 21 sick PSUs who took or are being offered VRS, most belonged to Hindustan Cables, HMT Watches, Hindustan Organic Chemicals and the Kota unit of Instrumentation.
In September 2016, the government announced timelines for the disposal of movable assets, sale of land and retrenchment of employees not opting for VRS to fast-track the closure of sick PSUs.

According to the department of public enterprises’ (DPE) new guidelines, the sick units will be closed within one year from the date of issue of minutes of the Cabinet approval; currently, the process drags on for years. In order to facilitate this, the settlement of statutory dues and payment to secured creditors are now being completed within two months.

VRSs at PSUs have gathered some extra momentum after the Modi government sweetened the package in September last year.

Under the September 2016 scheme, employees are offered VRS packages at notional 2007 pay scales. In addition, all dues including salary arrears will be settled at the time of separation. Prior to this, no settlements were allowed; in some cases, the staff had to accept early 1990s pay scales.

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Besides closure of sick units, the Cabinet gave an in-principle approval in October last year of about 20 PSUs (profitable as well as loss-making) for strategic sale. Recently, Air India was added to the list for strategic disinvestment. The national carrier has debt/dues worth Rs 60,000 crore, half of which may be written off by the government before it looks for a suitor.

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  1. S
    Stalin Palanisamy
    Sep 18, 2017 at 11:17 am
    Government decided to give VRS to all employees of HPF and settle all dues including ry arrears. But ONE OFFICER in DHI acting like a school boy with vengeance stopped ry to employees in January 2017 and deny VRS to remaining 167 employees, destroying image of Government among working class, IGNORING ALL HIGH COURT ORDERS. Employees and families forced to sell kidney to feed their children. Many attempt suicide. Modiji does not know about the high-handedness of this officer.
    1. S
      Aug 29, 2017 at 11:29 pm
      Who told HPF IS UNDER LIQUIDATION? USELESS FELLOWS.PLEASE CONFORM AND WRITE THE ARTICLE. S.Somebody waiting for loot the National property.
      1. S
        Aug 17, 2017 at 5:40 pm
        It's been a while since these reports have been doing the rounds - Sept 2016. I wonder if a few actually have shut down or is the Govt still trying to get around the red tape.
        1. G
          Jul 21, 2017 at 3:52 pm
          When TFPDCL can achieve records, why ANIFPDCL failed? Is there nay visionary lapses?
          1. R
            Jul 21, 2017 at 3:26 pm
            Lkjdkj }kjk ?kksfÔr vaMeku ,oa fudksckj }hi lewg] ou rFkk ckxku fodkl fuxe fyfeVsM (Hkkjr ljdkj dk ,d midze) ljdkj }kjk o"kZ 2002 esa fy, x, QSlys ds dkj.k bl fuxe dks Uk"V gks x k A ljdkj }kjk bl fy, yksl esfdax ?kksf"kr fd k x k A ljdkj us gkfu n'kkZrs gq, bl fuxe dks o"kZ 2017 esa can djus dk fu.kZ fy k x k A bu 15 o"kksZ esa gekjs nSfud fLFkfr dkQh [kjkc gks pqdk gS A vxj g QSlyk 15 o"kZ igys fd k x k gksrk rks g fLFkfr ns[kus ugh feyrh A bl 15 o"kZ esa de osru ds dkj.k ge vius cPpksa dks mPp f'k{kk ,oa 'kknh fookg djus esa vlerZ jgs A vkt gekjs deZpkfj ksa dks bruk de osru feyrk gS fd blls muds ,oa muds ifjokj Bhd izdkj ls viuk thou O krhr djuk cMh eqL[khy gS A bl fuxe ds deZpkfj ksa us dkQh gMrky Hkkh fd k gS ysfdu izc/ku }kjk lgh osru nsus dk gkeh fn k x k ysfdu vkt rd ml ij fdlh izdkj dk vey ugh fd k x k A
            1. R
              Jul 21, 2017 at 1:49 pm
              The Government of India had taken a decision for closure of the ANIFPDCL. The ANIFPDC is closed the employees and the family members of the ANIFPDCL are getting much more problems and their live hood in the Islands are very bad. A N Island is far from mainland and all food items and other miscellanies items are arriving to mainland and the rates are very much higher. The employees of the ANIFPDCL are getting a pension for Rs. 2,000/- per month as the same pension getting for the Old Age, Widow and Divyang people. In these Islands there are no any alternative jobs or no any factories for getting jobs for the people. If the Government of India taken a decision for closed the ANIFPDCL, the Government of India may be given a golden package for the employees of the ANIFPDCL.
              1. R
                Jul 21, 2017 at 9:44 am
                This is not a good and fair decision taken by the government. In the ANIFPDC 1800 employees were suffered directly. The government made their policies, the employees of the ANIFPDC suffered.The ANIFPDC passing through financial crisis during 2002 Why the Govt. of India take late decision ? The people are getting Rs. 2,000/- per month pension, how they are living and maintain their families ?.
                1. U
                  Umesh Sharma
                  Jun 22, 2017 at 6:51 pm
                  Good move by which tax payers' money would be saved from going in to drain and pave way for recovery of Public Sector Banks' money locked in for decades
                  1. S
                    Jun 22, 2017 at 4:59 pm
                    This is last tenure of bjp govt.
                    1. H
                      Jun 22, 2017 at 10:03 am
                      Extremely poor governance. We believed their promises of good governance and believed they will start making these PSU'S AI profitable but they are selling them instead of showing nation a sample of good governance. All are same looters as by earlier govts
                      1. N
                        Jun 21, 2017 at 9:38 pm
                        Good decision
                        1. V
                          Vivian Eric
                          Jun 21, 2017 at 9:35 pm
                          Will Burn Standard Co LTD, Burnpur works be closed down. We were to get permanent on September but due to insolvency it's being delayed
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