Finance minister Yashwant Sinha has actually saved Rs 1000 crores in the guise of creating a Restructuring Fund for terminal payments to employees of sick public sector undertakings.
Non-plan loans to PSEs, usually meant for paying wages and administrative expenses of sick units, has come down by Rs 1,000 crores compared to 1997-98 while an allocation of Rs 200 crores has been made for the Restructuring Fund.
The government has slashed non-plan loans given to several sick public sector enterprises, indicating a serious move to close them down. Some of them have been denied loans altogather in the 1998-99 budget, though they had received generous loans in 1997-98.
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PSEs who have been denied loans include Andrew Yule & Co., Hindusthan Paper Corporation, Instrumentation Ltd., Bharat Immunologicals & Biological Corporation, British India Corporation,Elgin Mills, Cawnpur Textile Mills Ltd., Praga Tools and Electronic Trade & Technology Development Corporation. These units had been given non-plan loans amounting to Rs 103 crores in the revised estimate of 1997-98.
Non-plan loans are usually meant to meet the expenditure on salaries, wages and administrative expenses of PSEs which are making heavy losses or have become almost non-functional.
Sinha's proposal to create a Restructuring Fund for payment of termination benefits to workers of units that will come under the axe, has been created by allocation of Rs 100 crores each by the ministries of textiles and industry, in their respective budgets.
At the same time, the textile ministry's loan allocation to sick units has come down from Rs 669.29 crores in the revised estimate of 1997-98 to Rs 556.65 crores this year, a reduction of Rs 112.56 crores.
The allocation for National Textile Corporation has been slashed from Rs 499.64 crores last year to Rs 380 crores this year. The Jute Corporation of India is getting Rs 16 crores against Rs 26 crores last year.
However, loan allocation by the ministry of industry has gone up slightly from Rs 402.11 crores last year to Rs 437.46 crores this year after taking into account the lumpsum provision of Rs 100 crores for terminal payments to workers of sick PSEs.
PSEs under the minsitry of industry which have suffered huge reduction in non-plan loans include Heavy Engineering Corporation which has been alloted Rs 16.37 crores against Rs 49.54 crores last year, Cycle Corporation of India whose allocation has come down from Rs 8 crores last year to Rs 5 crores this year and Rehabilitation Industries Corporation which is getting Rs 3.80 crores this year against Rs 7.50 crores last year.
The Central India Water Transport Corporation has been given Rs 8 crores as non-plan loan against Rs 13.40 crores it got last year. Bharat Refractories has been alloted Rs 50 lakhs against Rs 2 crores last year.
In the revised estimate of 1997-98, Andrew Yule & Co. had been alloted Rs 17 crores , Instrumentation Ltd. Rs 4 crores, Hindusthan Paper Corporation Rs 8 crores, Praga Tools Rs 2 crores, British India Corporation Rs 17.80 crores, Elgin mills Rs 34.20 crores, Cawnpur Textile Mills Rs 20 crores.