Govt to log into PSU reforms

Chalks out three-year action plan

After a two-year lull, the Andhra Pradesh government has decided to go ahead with the reforms initiated in the state's public sector undertakings (PSUs) during the Telugu Desam regime.

The state cabinet today approved a plan to implement restructuring under the 'Action Plan-3' in over 30 PSUs, including Singareni Collieries Company Limited (SCCL) and the Andhra Pradesh State Road Transport Corporation (APSRTC), with 10 entities a year in the next three years.

The proposed restructuring largely includes measures such as downsizing the manpower, mergers and divestment, according to officials linked with the public enterprises reform programme.

The government has broadly divided the 30 entities under corporate and cooperative categories. During the current financial year, the state government would undertake reforms in the State Trading Corporation, State Housing Corporation, APSRTC, AP Mineral Development Corporation and AP State Minorities Finance Corporation under the corporate category while the AP State Cooperative Bank (Apcob) and AP Women's Cooperative Finance Corporation would be under the co-operative category, according to the programme chalked out by the public enterprises department.

While the government corporations such as AP Industrial Infrastructure Corporation, AP Tourism Development Corporation, AP Civil Supplies Corporation along with two cooperative sugar mills are included in the second year's reforms programme, SCCL and a host of dairy development corporations and smaller cooperative entities are scheduled to undergo restructuring in the year 2008-09.

The government had to resume this exercise in the wake of a set of fiscal discipline norms envisaged by the Centre as well as to fulfil certain obligations for availing of external aid, according to sources in the government.

In a record of sorts, the state government is getting almost Rs 7,000 crore loan assistance from external agencies, including Rs 4,600 crore from the World Bank this year alone.

Besides, the World Bank DFID is extending Rs 800 crore financial support for the state health sector.

The Japan Bank for International Cooperation (JBIC) is also in the process of approving a Rs 2,000-crore assistance for the Outer Ring Road project, Rs 900 crore for the development of minor irrigation and about Rs 3,000 crore for the power sector, officials told Business Standard.