Montek Singh for strategic sale to revive sick PSUs

“We have always said let’s have a strategic sale rather than yet another restructuring.. . most of the time these companies say that if you help us revive, you will get more money,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.

“But if you don’t get strategic sale, why do you think it will revive....that keeps delaying the decision,” he added.

Earlier, the Economic Survey for 2008-09 had prescribed that all loss making PSUs which cannot be revived should be auctioned.

At present, over 20 state-owned companies, including Hindustan Fertilizer Corporation, Indian Drugs and Pharmaceuticals Ltd and Nagaland Pulp and Paper Company, are chronically sick.

Ahluwalia said the public sector units should generate resources internally as it would help the government increase its spend on welfare activities.

“They (PSUs) should increasingly get less budgetary support, we need the money for schools, hospitals, building roads and infrastructure...they can generate resources internally,” he said.

The government had approved Rs 15,254 crore for the 36 sick PSUs over three years, of Rs 4,877 crore has gone to 14 firms.

The companies, which have turned the corner by posting net profit since 2007-08, include Bharat Pumps and Compressors, Cement Corp, Heavy Engineering Corp and Andrew Yule.

The turnaround has been achieved through change in management strategy, government support and reduction of staff strength through voluntary retirement schemes.

The Board for Reconstruction of Public Sector Enterprises (BRPSE) was mandated to devise revival schemes for the state-owned sick PSUs.