The fate of the expert bodies set up by the UPA will depend on whether it returns to power after Saturday?s Lok Sabha poll results. While the Board for Reconstruction of Public Sector Enterprises (BRPSE), set up by the UPA to modernise India?s public sector, has finished examining the revival proposals of all the sick PSUs on its plate, the board believes the government failed in implementing its disinvestment programme. Even sick PSUs with no strategic importance and no revival prospects, where the NCMP allowed a selloff, were held on to. The board?s chairman Nitish Sengupta shares his take on the BRPSE?s performance with FE?s Praveen Kumar Singh Excerpts:
•How do you rate the performance of the board?
We are just an advisory body and not an executive body. We could just give recommendations to the government on revival of sick companies. However, most sick companies that were referred to us are now making operating profits. Heavy Engineering Corporation and Assam Ashok Hotel Corporation Ltd are two among the 25 such cases. There is general orientation of profitability now.
BRPSE has submitted recommendations in 54 cases. We have suggested revival through packages, joint venture and disinvestment of government stake. The government has approved the revival packages in 34 cases and has closed two companies. The number of sick companies has come down from 59 in 2006-07 to 54 in 2007-08 and around 30 now. The board has also attached sick PSUs to profit-making government enterprises. Under this initiative, Bharat Heavy Plate and Vessels Ltd has been attached to Bharat Heavy Electricals Limited and Bharat Coking Coal to Coal India Ltd.
We also wanted to attach telephone instruments maker ITI Ltd (earlier known as Indian Telephone Industries) to BSNL. But BSNL does not want to enter the instrument making business. However, the company is the perfect match for ITI Ltd and hence we have approached the government to issue suitable directions. I understand that the matter was discussed in the Cabinet just before the general elections started.
•Has the UPA government?s record on disinvestment been satisfactory?
The government hasn?t done anything on disinvestment. We suggested disinvestment in the case of Cable Corporation of India, but the government has taken no action. In case of HMT Chinar Watches also we had said that the company should be offered to a PSU. If that is not possible, a private sector partner should be brought in through disinvestment. But nothing of that sort happened.
The government was ignorant of disinvesting in sick PSUs initially. However, at the fag end of his tenure, the Prime Minister recognised the importance of disinvestment and asked all PSUs to list on stock exchanges.
PSUs have profitability potential. This is evident from the fact that around 50 PSUs that are listed on the Bombay Stock Exchange account for 25% of total capitalisation of the BSE. Even after realising the potential, the government did not do anything.
•And the Left parties played a key role in this immobility of the government?
Could be.
•Is the board working on any case now?
BRPSE has got no pending cases. That?s why in one of our meetings in January this year, we decided to take suo motu investigation in the operation of Air India, which is losing market share every year. We put up a request with the civil aviation ministry, but got no reply. Let?s see what happens after the elections.