|NITI Aayog vice chairman A Panagariya|
sick firms. Whether you close them down or you restructure them. It is slightly at the advanced stage. The second issue deals with disinvestment. The work is underway," Panagariya said.
Union Finance Minister Arun Jaitley in his 2016-17 budget speech announced that the job of identifying the public sector companies for the proposed strategic sale has been entrusted to NITI Ayog. NITI Aayog has been tasked to submit two lists of companies with its recommendations with regard to those that are sick and those that qualify for disinvestment.
Stating that they hope to move fast on the second set of companies as well, Panagariya, however, declined to give a specific time-line by when the NITI Aayog will submit its report on the strategic sale.
A CPSE is declared sick after it has accumulated losses in any financial year equal to 50 per cent or more of its average net worth during four preceding years. There are 65 units in the list of sick public sector units as of March 31, 2014.
The CPSEs which are part of this list include MTNL, Air India, Bengal Chemicals, Konkan Railway Corporation, Hindustan Shipyard, HMT, Bharat Coking Coal, ITI, Bharat Wagon and Engineering, Tungabhadra Steel, Scooters India, Heavy Engineering Corporation, National Jute Manufacturers, Burn Standard, Fertilizer Corporation of India, British India Corp among several others. The government has time and again been taking various measures for revival of sick or loss-making CPSEs. Setting up a separate entity funded by financially strong CPSEs to look at management and revival of sick companies is one such measure. Cash-rich profitable PSUs can also be roped in to support and revive the loss-making/sick CPSEs as part of their mandatory corporate social responsibility (CSR) practice.