Sources in the state government revealed that while the first two bodies would facilitate introduction of a transparent mechanism for the selection of private parties, the third, that is, the state renewal fund would not only help in implementation of the voluntary retirement scheme but would ensure removal of glitches in dealing with the sensitive issue of retrenchment of employees.

According to sources, the proposal for creation of these three bodies is likely to be placed before the Cabinet for approval shortly. What has spurred the complacent Kalyan Singh government to take action for improving the prevailing chaos in the state's 50 PSUs is a recent survey conducted by the state government which reveals that the PSUs are losing a whopping Rs 1.73 croredaily.

Not only that, of the 50 PSUs in UP, 16 have already fallen into the sick category while another eight are in the red and fast on their way to joining the sick bandwagon. While the remaining 26 PSUs are profit-making, their profits are not large enough to wipe out the losses of the loss-making units. In fact, the survey reveals that against a profit of Rs 14 lakh being made by the profit-making PSUs daily, the loss-making units are incurring losses to the tune of Rs 1.84 crore every day of which the sick units alone account for a loss of Rs 1.35 crore.

And while the total annual losses amounted to Rs 629 crore for the 1996-97 fiscal, the PSUs spent a mind-boggling Rs 1,501 crore on salaries and wages alone, which was 16 per cent more than the Wage Bill for the preceding year.

Not surprisingly therefore, the Kalyan Singh government has intensified efforts to privatise, merge or close sick PSUs. In a latest diktat to heads of all government departments, chief secretary Yogendra Narain hascryptically instructed them to "make every possible effort to encourage private participation".

It may be mentioned that earlier this year, the UP government had set up a task force headed by the chief secretary himself to oversee the functioning of the PSUs which had recommended the closure, privatisation or merger of loss-making PSUs in no uncertain terms "since the government has no additional resources for additional investment, no proposal for their revival be sent in future to the government".

Justifying their closure on the grounds that it had been recommended by the Board for Industrial and Financial Reconstruction quite some time ago, the task force had recommended closure of units such as the chronically sick Uptron India Ltd, UP Instruments Ltd, UP Mineral Development Corporation and the UP Minorities Finance Corporation. It had additionally proposed that the employees of these corporations be encouraged to go in for VRS failing which they should be retrenched.

The task force had alsorecommended strengthening of profit-making PSUs to facilitate the merger of some loss-making PSUs with them.

Despite these recommendations, no action was taken by the Kalyan Singh government till matters went out of hand with protests staged by employees of the ailing UP Cement Corporation last month which had led to the death of a worker. Jolted out of its reverie, the Kalyan Singh government immediately resorted to the fire-fighting measure of announcing payment of three months' salaries to the agitating workers.

However, realising that several such agitations could be in the offing in other sick PSUs as well, state government sources said the Kalyan Singh government was making all-out efforts to ensure that the independent regulatory Authority, the disinvestment commission and the state renewal fund are set up on a priority basis.