New Public Sector Undertakings may revive sick ones

New Delhi:To revive sick PSUs, government has formed a committee to study feasibility of setting up a company funded by Maharatna and other cash-rich PSUs to manage such sick PSUs which can be revived.

This is significant as last month finance minister Arun Jaitley had announced that four public sector companies, which cannot be revived will be shut down. It was seen as a bold measure, as UPA had dragged its feet from taking stern action against those PSUs which can’t be revived.

Mr Jaitley had also said that seven sick PSUs will be revived through disinvestment and the joint venture route. Finance minister had warned PSUs to brace themselves to deal with the competitive environment. The committee which has been set up by the ministry of heavy industries and public enterprises will be headed by NTPC, CMD, Arup Roy Chodhury.

“The issue of revival of the sick CPSEs has been drawing the attention of the government and a suggestion has been received regarding setting up a separate company funded by seed equity from Maharatna and other surplus rich CPSEs to administer and manage such sick CPSEs which can be revived,” said office memorandum issued by the ministry. The committee will look into administrative, financial and legal aspect of the proposal.

It will identify the sources from which the funds may be raised for the proposed entity as equity capital. The committee will recommend the organisational structure of the proposed entity and its interface with ministries and other organisations.It has been asked to submit its report to the government within two months.