Budget gives equity in PSUs a fillip

The United Progressive Alliance government's thrust on strengthening public sector companies has resulted in a Rs 1,146 crore increase in budgetary support in the equity component for 2004-05, which is 65 per cent higher than the equity contributed by the NDA government in last year's Budget.

Jaswant Singh had increased the budgetary support for bolstering the equity of PSUs by Rs 695 crore, when he presented the Budget for 2003-04. There is, however, no allocation for telecom and petroleum public sector units in the Budget.

While announcing the support for public sector units, P Chidambaram had said not enough support had been given to profitable public sector units with major investments lined up for power, telecommunications, Railways, roads, petroleum, coal and civil aviation.

Of the Rs 14,124.41 crore extra equity for public sector units promised by Chidambaram, aviation public sector units are proposed to be given Rs 17 crore, of which Rs 1 crore each for A-I and IA, while the Airports Authority of India is budgeted to get the remaining Rs 15 crore.

Compared to the interim Budget in February, Chidambaram has projected an increase of Rs 352 crore, but there is no change in the loans to be given to the public sector units, which have been estimated at Rs 2,132.56 crore.

Of the proposed equity infusion from the Budget, 49 per cent has been earmarked for the Railways, which is proposed to  get a budgetary support of Rs 6,919 crore during the fiscal, against Rs 6,944 crore earmarked in the revised estimates for 2003-04.

In case of the power sector units, Rs 2,635 crore has been provided, of which, Rs 1,142 crore has been earmarked for the National Hydro-electric Power Corporation, Rs 879 crore for projects and schemes in the northeast, while Rs 300 crore each have been earmarked for the Power Grid Corporation and the Tehri Hydro Development Corporation.

The Nuclear Power Corporation is proposed to be given Rs 1,283 crore as equity during 2004-05. Another Rs 50 crore is earmarked for Ireda under the ministry of non-conventional energy.

The National Highways Authority of India has been allocated Rs 1,848 crore during the fiscal, while public sector units under the coal and mines ministries have been allocated Rs 42 crore through the Budget.

In case of public sector units like Hindustan Antibiotics, for which Chidambaram promised financial support for restructuring, the government has earmarked Rs 2.77 crore loan from the Budget.

For Indian Telephone Industries, the government approved a Rs 528 crore package, including waiver of loans and interest through non-Plan support.