NITI Aayog shortlists ‘sick’ PSUs for closure

The Niti Aayog has come out with a list to wind up ‘sick’ public sector undertakings (PSUs), which have “no potential of revival” and are putting a financial burden on the exchequer.

According to sources, the Aayog is finalising a plan to bring the shutters down on all such PSUs where several attempts by the government to make them profitable have come a cropper. “A huge amount of money has already been spent on the revival of sick PSUs, but nothing much has happened. The Aayog has finalised the list of PSUs to be closed after consultation with the Board for Industrial and Financial Reconstruction (BIFR),” a source said, adding that final decision in this regard would be announced very soon.

The PSUs likely to figure on this list are Tungabhadra Steel, HMT Bearings Ltd, Indian Drugs & Pharmaceuticals Ltd, Hindustan Cables and HMT Watches Ltd, among several other PSUs.

“After brainstorming over the performance audits of all sick units, the Niti Aayog has shortlisted the sickest for winding up. Also, the Aayog has suggested different models to deal with issues like rehabilitation of affected employees,” the source said, adding that the cost of operation exceeds production in the sick units.

In the Budget speech, the Finance Minister too directed the PSUs to disinvest. According to Budget proposals, the Centre hopes to raise Rs 56,500 crore by selling stakes in state-owned enterprises in 2016-17, out of which Rs 36,000 crore will come from minority stake sales and Rs 20,500 crore from strategic stake sales.

Earlier, the closure of Hindustan Cables was deferred after Defence Ministry showed interest in it after some of the employees approached the government seeking a review of the move.