Government may wind up BRPSE, constitute new entity for sick PSUs

NEW DELHI: The government is considering a proposal to dissolve the Board for Reconstruction of Public Sector Enterprises (BRPSE), heavy industries minister Anant Geete said on Tuesday.
"We are in discussions to create a new entity for sick PSUs," he said on the sidelines of a Confederation of Indian Industry (CII) function.

According to a government official, a cabinet proposal to shut down the BRPSE, which prepares revamp plans for sick public sector enterprises, may be soon moved by the ministry of heavy industry and public enterprises.

The move to wind up BRPSE is expected to clear way for the government to pursue option of stake sale in most of the sick 65 central public sector companies (CPSE).

So far BRPSE has approved revival of 48 CPSEs and closure of 4 CPSEs envisaging a total fund assistance of Rs 41,139 crore.

The list of sick PSUs includes Scooters India, Hindustan Shipyard, ITI and Hindustan Cables.

As per the Public Enterprises Survey 2013-14, losses at sick/loss-making CPSEs declined 29.78 per cent to Rs 20,055 crore in 2013-14 from Rs 28,562 crore in 2012-13.

There were 290 CPSEs in 2013-14, out of which 234 were in operation.

Last month, Geete had said there were 65 units in the list of sick PSUs as of March 31, 2014.

"The reasons for their sickness vary from enterprise to enterprise and included obsolete plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital," he had said.

A CPSE is declared sick after it has accumulated losses in any financial year equal to 50 per cent or more of its average net worth during four preceding years.

In case of companies that are being closed, Geete had said the government will offer their employees a "very good" VRS package.