Financial Daily from THE HINDU group of publications
Friday, Aug 16, 2002
Industry & Economy
GoM grapples with problem of PSU dues
NEW DELHI, Aug. 15
THE decision by a meeting of the Group of Ministers (GoM) on payment of outstanding statutory dues and outstanding salaries and wages of employees of Central public sector undertakings (PSUs) held on Wednesday has come out with a "realistic assessment" of the ground realities prevailing in the PSUs. The assessment should help in making the disinvestments of PSU shares credible and possible.
Official sources told Business Line here that the Planning Commission Deputy Chairman, Mr K.C. Pant, who is also the Chairman of the GoM, was worried over the accumulated arrears and outstanding statutory dues of as many as 73 PSUs out of the 240 PSUs which amount to a staggering Rs 2,068.84 crore (comprising Rs 1,600.87 crore outstanding statutory dues and Rs 467.97 crore of salaries and wages).
Out of the 73 enterprises with outstanding dues, 43 are sick. Major Ministries/departments with substantial dues pending include Ministry of Textiles at Rs 27 crore, Department of Heavy Industry at Rs 20.3 crore, Ministry of Coal at Rs 20.1 crore and Ministry o Steel at Rs 16.5 crore.
Mr Pant is apparently of the view that any delay in settling the outstanding dues of Central PSUs would only add to the liabilities day by day, thereby reducing the attractiveness of the disinvestment candidates.
The sources said that the payment of statutory dues is, as per law, the primary responsibility of the management. The Government, might, however, extend financial support as a one-time measure based on the action plan of the administrative Ministries/departments for closure/winding-up or revival.
The approach is to obtain payment of such dues to the maximum extent from the resources of PSUs, but to the extent inevitable, budgetary support might be extended by the Government to meet the resource gap of the particular PSU.
The sources said the Department of Public Enterprises had already put in place a draft report to address the outstanding dues of PSUs.
Accordingly, every administrative Ministry should draw a time-bound programme for revival/disinvestments/closure of their non-strategic enterprises as the case might be in respect of sick PSUs.
The non-performing assets of the Central PSUs are to be disposed of as expeditiously as possible to generate funds to clear the outstanding dues.
The administrative Ministries and the concerned PSU, on a time-bound manner, might initiate the process of disposal of such non-performing assets, the sources noted.
It is in the light of these suggestions contained in a draft report prepared by the Department of Public Enterprise that the GoM resolved to categorise these PSUs with outstanding dues into four segments.
It was pointed out that as most of the PSUs with outstanding dues could manage to clear the arrears on their own through the various options being suggested to them, the one-time measure to help bail out chronically sick PSUs of their outstanding statutory dues might cost around Rs 500-600 crore.
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