The loss of Rashtriya Ispat Nigam Limited was to the tune of Rs 1,477 crore, which alone offset the cumulative profit of 9 Navratna PSUs.
During the four years to FY 2018-19, there were 79, 78, 72, and 70 loss-making PSUs respectively.
Finance Minister Nirmala Sitharaman said that better performance by PSUs can significantly help the economy recover from the impact of the coronavirus pandemic. Nirmala Sitharaman encouraged state-run firms to perform better to achieve targets and to ensure that the capital outlay for the current fiscal year 2020-21 is spent properly and timely while reviewing the performance. The finance minister further said that the capital expenditure by PSUs is a critical driver of economic growth, and needs to be scaled up for the present and upcoming fiscal year. However, PSUs have their own story to tell.
Out of the 14 Navratna PSUs, MTNL, Oil India, and Rashtriya Ispat Nigam Ltd registered a loss in the first quarter of the current financial year, while the other 11 firms registered a net profit. However, the loss of Rashtriya Ispat Nigam Ltd was to the tune of Rs 1,477 crore, which alone offset the cumulative profit of nine Navratna PSUs, according to the data provided by Prakash Javadekar, Minister of Heavy Industries and Public Enterprises, in a reply to a question in Lok Sabha. During the four years to FY 2018-19, there were 79, 78, 72, and 70 loss-making PSUs respectively.
Disinvestment and closure of PSUs
The Government has given ‘in principle’ approval for strategic disinvestment of 34 PSUs and Joint Ventures of CPSEs, with the sale of the majority stake of the government and transfer of management control. Out of these 34 PSUs, Hindustan Fluorocarbon Ltd is ready for closure. Further, the government has approved 21 PSUs for closure, according to the parliament papers.
Capacity building of PSUs
In an effort to improve the conditions of PSUs, the Department of Public Enterprises has taken various measures such as professionalization of the Boards of PSUs through filling up vacant positions of Non-official Directors and monitoring the capital expenditure of selected PSUs and sending monthly reports to the PMO. Granting autonomy and financial delegation to PSUs under corporate governance and organising training, workshops, and orientation programmes are also among the measures taken to uplift the condition of PSUs.
Meanwhile, the Finance Minister has asked the concerned Secretaries to closely monitor the performance of PSUs in order to ensure the capital expenditure to the tune of 75 per cent of the capital outlay by the end of Q3 FY21. She added that more coordinated efforts are required at the levels of Secretary of concerned Ministries and CMDs of CPSEs to achieve capital expenditure targets.