FM: 4 PSUs to shut, more under watch





The government on Tuesday said four public sector companies which cannot be revived will be shut down. Finance minister Arun Jaitley asked others to shape up to deal with free competition in an era when state-run firms have lost monopoly rights and preference, marking a clear shift in the Centre's policy .

In the case of seven other PSUs, Jaitley told Parliament that the government was trying to revive them via disinvestment and the joint venture route. His stern statement means the government is ready to bite the bullet on controversial reforms to repair public finances and put the economy on a higher growth trajectory .

The minister said that 79 central public sector enterprises have incurred losses, of which 49 are sick. At the same time he said there are 19 that have turned around, indicating that there will be an effort to revive the viable ones that remain competitive.

Coming days after the finance minister said that being pro-business does not amount to being anti-poor, Tuesday's statement is being seen as a signal that it won't be business as usual in matters of economic policy.

For a decade, the Manmohan Singh government had dra gged its feet on shutt ing down even termi nally sick PSUs des pite it clearly stating it as a policy goal. As a result, the governme nt kept on pumping e money to pay salaries and keep these money-guzzling enti ties alive, all for the sake of po litical expediency .

The Union finance minis ter stated that over Rs 1.57 lakh crore has been pumped into these enterprises over the past few years alone. While there had been interest from the pri vate sector in some of the units of Cement Corporation, among others, the UPA government failed to decide on the issue.

On Tuesday , finance minister Arun Jaitley urged PSUs to learn to function like private business houses in a competitive environment.
"The PSUs must learn how to function like any other business organization in a competitive environment and should not be run like a government department," he said while replying to supplementaries in the Rajya Sabha. Management of lossmaking PSUs have to be part of market economy , the minister said.

The government has also lined up an ambitious asset sale programme and aims to raise over Rs 63,000 crore by selling stakes in state-run firms. It has also outlined the need to provide managerial autonomy to blue chip PSUs to compete globally .