Jaitley said that over Rs 1.57 lakh crore has been pumped into these enterprises over the past few years
GN Bureau | July 23, 2014
Marking a clear shift in the centre’s policy of running public sector enterprises, finance minister Arun Jaitley on Tuesday asked CPSEs to shape up to deal with free competition in an era when state-run firms had lost monopoly rights and preference.
Jaitley told parliament that four central public sector enterprises (CPSEs), which cannot be revived will be shut down. And in case of seven others, the government is trying to revive them through disinvestment and the joint venture route.
The minister said that 79 CPSEs have incurred losses, of which 49 are sick. At the same time there are 19 that have turned around.
For a decade, the UPA government showed hesitance on shutting down even the terminally sick PSUs. As a result, it kept on pumping money to pay salaries and keep these money guzzling entities alive.
Jaitley said that over Rs 1.57 lakh crore has been pumped into these enterprises over the past few years. While there had been interest from the private sector in some of the units of Cement Corporation, among others, the UPA government failed to decide on the issue.
On Tuesday, 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 loss making 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.
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