The GoM, at its meeting on Thursday under Planning Commission deputy chairman KC Pant, has also directed healthier PSUs to pay their dues within a couple of months. Minister of heavy industries & public enterprises Balasaheb Vikhe Patil, law minister Jana Krishnamurthy, labour minister Sahib Singh and representatives of the finance and disinvestment ministries attended the GoM meeting.
The ministry of heavy industries will move a proposal for an enabling provision for the disposal of assets of PSUs which are beyond redemption. The provision would help government bypass BIFR, a route that involves a lot of time. Mr Krishnamurthy has assured to positively consider the issue, said ministry sources.
Mr Pant was of the opinion that unless legal aspects were taken care of, the issue could not be sorted out, they added. There are some legal issues involved. The ministry of heavy industries and the law ministry will look into them, Mr Pant later told reporters.
Finance ministry officials were of the opinion that budgetary support could be provided to sick PSUs only on the condition that there is no diversion of funds. They found support from the disinvestment ministry on this issue.
The representative of the disinvestment ministry said that the payment of dues should be expedited in the case of PSUs which are in an advanced stage of privatisation. Such PSUs are Jessop & Co, Tungabhadra Steel, Hindustan Copper, Nepa and Instrumentation Ltd. The ministry has been favouring a policy to link revival packages for PSUs with their privatisation or closure.
The GoM, at its earlier meeting on August 14 last year, had pointed out that only one-time budgetary support should be provided.
The GoM had also directed the department of public enterprises to classify the 73 defaulting PSUs into four categories: profit-making PSUs; the PSUs which could mobilise their own resources to clear their dues; the PSUs which had no readily-available resources but owned assets that could be disposed of; and the PSUs which had neither readily-available resources nor disposable assets.
It is the 28 PSUs in the last category that require budgetary support in excess of Rs 750 crore, said sources.
Many of these PSUs are under the purview of the textiles ministry. The GoM directed the ministry to expedite the rehabilitation of National Textile Corporation by June 2003 as against the ministrys intended target of December 2003.
The GoM was of the opinion that mechanisms and modalities should be developed for the disposal of the whole or part of PSU assets with the help of merchant bankers and asset valuers.
The GoM will meet again within a month and a half.