Loss Making PSUs

The details of the loss making Central Public Sector Enterprises(CPSEs) for the last three years, based on the Public Enterprises Survey 2009-10 that was laid in the Parliament on 24 February, 2011 are as below:

Years	No. of loss making CPSEs	Amount (Rs. in lakh)
2009-10	59	15842
2008-09	55	14621
2007-08	54	10303

Although Department of Public Enterprises(DPE) issues guidelines for pay, etc. including Performance Linked Incentives(PLI) in respect of executives and non-unionised supervisors, wages including PLI of workmen is based on negotiations between the management and trade unions of each CPSE and may vary from one CPSE to another. The DPE O.M. dated 25 March, 1999 (1997 Pay Revision), stipulates that payment of perquisites and allowances may be upto a maximum of 50 per cent of the basic pay; payments over and above the ceiling of 50 per cent should be entirely in the nature of Performance Related Payment (PRP) which should not exceed 5 per cent of the distributable profits in an enterprise. Furthermore, the DPE on 27 March, 2000 has clarified that in normal circumstances the PLI should be within 50% of the basic pay, and if the limit is not considered sufficient to reward the employees for their work, the CPSEs can go beyond 50% of basic pay but within 5% of distributable profits.

While PRP is entirely dependent/based on the profit of a CPSE, the PLI may not be so. PLI cannot, therefore be disbursed in place of PRP, PLI, if any, can only be distributed within the 50% ceiling on perks & allowances of the Basic Pay of the individual executive. In view of the above, the payment under PLI is to be decided by the concerned CPSE with the approval of their administrative Ministry/Department as per DPE’s guidelines. DPE does not, however, maintain information in this regard on centralised basis.

The Government has set up a Board for Reconstruction of Public Sector Enterprises (BRPSE) in December, 2004 as an advisory body to advise the Government, inter alia, on the revival and restructuring of sick/loss making CPSEs. The concerned administrative Ministries/Departments of the CPSEs prepare proposals for revival of sick companies and refer them to BRPSE for recommendations. The Government is open to induct private sector to turnaround companies that have potential for revival on case to case basis.

During the last three years i.e. 2007-08, 2008-09 and 2009-10, the Government has approved revival/restructuring of 14 CPSEs envisaging a total assistance of Rs. 14,757 crore (cash assistance of Rs. 1321 crore in the form of infusion of funds and non-cash assistance of Rs. 13,436 crore in the form of waivers/write offs of interest/loans, etc.