 "Disinvestment")
A Parliamentary panel has suggested the government to tread with caution in strategic divestment and shutting down sick public sector units (PSUs) and also asked it to provide reasonable and financially prudent chances for their revival.
In its report, the Department Related Parliamentary Standing Committee on Industry said it is always prudent to keep in mind that Central Public Sector Enterprises (CPSEs) are also meant to serve certain larger social causes.
Citing example of the 100 per cent disinvestment of Hindustan Newsprint (HNL), it said the decision was taken despite the dissent of the Department of Heavy Industries.
"Taking this case as a cue, the committee recommends that the Niti Aayog shall be asked to take a more holistic view in case of decisions regarding CPSEs that may be perceived to have a chance of progressing well with a little help. This is based on the considered opinion of the committee that CPSEs are still relevant and they may be allowed reasonable and financially prudent chances to revive and restructure," the report said.
It noted that the Niti Aayog has recommended strategic disinvestment of five units, transfer to states of four, one for part divestment and two to be considered for later disinvestment.
The committee observes that if these recommendations are approved, the department will be left with "very few" CPSEs under its administrative control, it said.
In a separate report on the Department of Public Enterprises (DPE), it said that one of the causes for which the PSUs were envisaged was for equitable economic and social development and it is still relevant to India and it has to be kept in mind along with financial and business prudence while deciding the closure or strategic disinvestment of CPSEs.
It recommended that CPSEs should be encouraged to provide permanent employment to people and may be "desisted" from hiring personnel on contract basis.
The committee also suggested that DPE being the body in charge of the general policy framework for the enterprises, should conduct a well-organised comprehensive research study to identify the areas of business where these units can successfully/profitably operate and grow.
"A policy of public investment in CPSEs can be based on the findings of such a scientific study. This, in the opinion of the committee, should help to ensure that the 76 CPSEs that are being newly set up by the government to operate in a profitable environment and are not doomed to be shut due to extraneous factors," it added.
Regarding the revival/restructuring or closure decision of CPSEs, it said along with financial and business considerations, social obligations of the government should also be given equal weightage.
"CPSEs can still play a relevant remedial role in rectifying such imbalances," it said adding CPESs should not be allowed to grow into "white elephants eating into the very vitals of valuable resources of the nation taking recourse to the plea that their existence is necessary for addressing social causes".
With respect to the disposal of land of CPSEs identified for closure or strategic disinvestment, the committee said that such land should remain with the central or state government or government agencies to the extent possible.
"It should be ensured that the land does not change hands to private entities without a properly assessed remunerative vale accruing to the public exchequer," the Parliamentary panel report said.
