Five ailing PSUs including 3 HMT units to be shut down; Employees to get 'very good' VRS package

IT'S FINAL. Narendra Modi-led NDA government will close down five sick public sector undertakings (PSUs). There are altogether 65 sick PSUs including Air India, MTNL and Hindustan Shipyard.

"The five state-run organisations to be closed down include three HMT units, whose brand of...

watches and tractors once ruled the market," heavy industries minister Anant Geete said during Question Hour in Lok Sabha on March 10, adding that their employees were being offered a "very good" VRS package.

However, the minister did not name the other PSUs which are slated to be closed down.

The minister said there were 65 units in the list of sick PSUs as of March 31 last year.

"The reasons for their sickness vary from enterprise to enterprise and included obsolete plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital," he said.

He said the concerned administrative ministries "prepare proposals for revival or otherwise of sick companies on case to case basis and obtain approval of the government."

Air India and MTNL, once crown jewels of the government in aviation and telecom sectors respectively, were declared sick according to the criteria for a PSU to be declared as such, after they incurred losses worth 50 percent or more of their average net worth during four preceding years.

Air India accumulated losses of Rs 5,388 crore, Rs 5,490 crore and Rs 7,559 crore in years 2013-14, 2012-13 and 2011-12 respectively, according to the figures tabled in the House.

MTNL showed profit of Rs 7,820 crore in 2013-14 but had incurred losses of Rs 5,321 cr and Rs 4,109 cr in the previous years. Hindustan Shipyard posted losses of Rs 859 crore, Rs 551 crore and Rs 462 crore in the three years.