publicsectorenterprisesreforms2-121027095528-phpapp02.pdf

8/18/2019 publicsectorenterprisesreforms2-121027095528-phpapp02.pdf

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P U B L I C S EC TO R

E N TE R P R I S ES R E F O R M SPSE’s includes Government companies inthe Central and State Sectors

These industries covers a wide spectrum ofactivities in basic and strategic industrieslike:Steel Heavy Eng. TourismCoal Chemicals FinancialMinerals Fertilizers TradingPetroleum Transp. Marketing


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In India, a government-ownedcorporation is termed as a publicsector undertaking (PSU ). This termis used to refer to companies in whichthe government (either the federal

Union Government or the many state orterritorial governments, or both) own amajority (51 percent or more) of the

company equity


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WHY THE PSE’S ?Public enterprises help in rapid economicgrowthIt creates the necessary infrastructure foreconomic developmentTo earn return on investment and generateresources for developmentTo promote redistribution of income and wealthTo generate employment opportunitiesTo promote balanced regional developmentTo assist the development of small-scale ind.To earn foreign exchange for the economy


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Investment in the PSE,s during plans

Five year Investment No.of PSE,sPlan (in crores)Ist plan 29 52 nd 81 21

3 rd 953 484rth 3902 855 th 6237 1226 th 18,225 1867 th 42,811 221

8 th 1,18,492 2379 th 2,01,500 2381999 2,73,700 2352002 3,24,614 2402003 3,33,475 240


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H I G H L I G H TS O F P U B L I C

E N TE R P R I S E S S U RV E Y 2 0 0 2 - 2 0 0 3 )

Gross turnover of all 240 PSU’s during 2002-03 has been Rs.544390 crore againstRs.478732 crore during 2001-02Net profit of all 240 PSU’s during 2002-03 hasbeen Rs. 32141 crore against Rs. 25978 in

2001-02During 2002-03 profit earning PSU’s earnednet profit of Rs. 43085 crore while lossmaking PSU gave net loss of Rs. 10944 crore.

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1. Arms and Ammunition and allied items of defence equipment2. Atomic energy

3. Iron and Steel4. Heavy casting and forging of steel items5. Heavy plant and machinery required for iron and steel production, for mining for machine

tool manufacture and such other industries as may be specified by the CentralGovernment.

6. Heavy electrical plant including large hydraulic and steam turbines

7. Coal and lignite8. Minerals oils9. Mining of iron ore, manganese ore, chrome ore, gypsum, sulphur, gold and diamond.10. Mining and processing copper, lead, zinc, tin molybdenum and wolfram11. Minerals specified in the Schedule to the Atomic Energy (Control of Production and Use)

Order 1953.

12. Aircraft13. Air transport14. Rail transport15. Ship building16. Telephones and telephone cables, telegraph and wireless apparatus (excluding radio

receiving sets)

17. Generation and distribution of electricity

Industries reserved for PSU’s prior to July 1991


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1. Arms and Ammunition and allied items of defence equipment,defence aircraft and warship

2. Atomic Energy

3. Coal and Lignite

4. Mineral Oils

5. Mining of iron ore, manganese ore, chrome ore, gypsum, sulphur,gold and diamond

6. Mining of copper, lead, zinc, tin, molybdenum and wolfram7. Minerals specified in the schedule to Atomic Energy (Control of

production and use) Order, 1953

8. Railway Transport

Industries reserved for PSU’s since July 1991


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Industries reserved for PSU’s since December2002

• Atomic Energy

Minerals specified in schedule to atomic Energy (Control ofProduction and Use) Order, 1953

Railway Transport Arms and Ammunition


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Navratna was the title given originallyto nine Public Sector Enterprises (PSEs)identified by the Government of India in1997 as "public sector companies thathave comparative advantages", giving

them greater autonomy to compete inthe global market so as to "supportthem in their drive to become global

giants"


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I D E N TI F I C ATI O N O F P U B L I CS EC TO R E N TE R P R I S E A S N I N E

G E M S

SAIL IOCL

VSNL HPCLBPCL ONGCBHEL NTPCIPCL GAILMTNL


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Two of these namely IPCL and VSNL havesince been privatized and as on July 2003there are only 9 NAVRATNA PSEs. Theprofitability of these 9 ratna was Rs.15508crore during 2001-02


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The number of PSEs having Navratnastatus has been raised to 16,the mostrecent addition being Oil India Limited


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In addition, the government created anothercategory called Miniratna. Miniratnas canalso enter into joint ventures, set subsidiarycompanies and overseas offices but withcertain conditions. In 2002, there were 61

government enterprises that were awardedMiniratna status. However, at present, thereare 66 government enterprises that were

awarded Miniratna status.


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In 2009, the government established theMaharatna status, which raises acompany's investment ceiling from Rs.1,000 crore to Rs. 5,000 crore.TheMaharatna firms can now decide on

investments of up to 15 per cent of theirnet worth in a project; the Navaratnacompanies could invest up to Rs 1,000

crore without explicit government approval.


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CriteriaThe six criteria for eligibility asMaharatna are:Having Navratna status.Listed on Indian stock exchange withminimum prescribed publicshareholding under SEBI regulations.


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An average annual turnover of morethan Rs. 20,000.crore during the last 3years. Earlier it was Rs 25,000 Crore.

An average annual net worth of morethan Rs. 10,000 crore during the last 3

years. Earlier it was Rs. 15,000 crore.


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List of MaharatnaCoal India LimitedIndian Oil Corporation LimitedNTPC Limited

Oil and Natural Gas Corporation LimitedSteel Authority of India Limited


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What is disinvestment?

Disinvestment means - A reduction in capitalinvestment or Withdrawal of capital investment

from a company is called disinvestment Its totally opposite of investment


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About disinvestment

Mostly govt do disinvestment on those companiewhich are running in loss or doesn't run properly

Govt doesn't do disinvestment in high profitmaking co.


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Conditions

Govt must attain 51% share or stake in pse(publisector enter pries) after disinvestment for pse

Govt do disinvestment upto 20% of their capitalin one time in pse


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D I S I N V E S T M E N TP R O G R A M M E S I N P S E’S

The disinvestment process, which began in1991-92 with the sale of minority stake insome public sector undertakingsThe new policy in this regard is that thegovernment is committed to a strong andeffective public sector whose social objectivesare met by its commercial functioningThe Govt. is committed to devolve fullmanagerial and commercial autonomy tosuccessful, profit making companiesoperating in a competitive environment


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Generally, profit making companies will not beprivatized

As per the National Common MinimumProgramme (NCMP) the Government retainexisting ‘Navratna’ Companies in the PublicSectorLoss making companies either sold off orclosed, after all workers get their legitimatedues and compensationThe Government has approved the constitutionof a National Investment Fund (NIF)comprising of proceeds from disinvestment of

public sector unitsThe Govt. has also given in principle approvalfor listing of currently unlisted profitable PSEseach with a net worth in excess of Rs.200crore, through an initial public offer (IPO)


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O B J E C TI V E S O FD I S I N V E S T M E N T

Modernization and up gradation of PSEsCreation of new assetsGeneration of EmploymentRetiring of Public DebtTo ensure that disinvestments does notresult in alienation of national assets,which through the process ofdisinvestments, remain where they are

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COMPANIES IN WHICHDISINVESTMENT IS DONE

BHELBPCLCONCOR GAILHCLSAIL

NTPCNMDC VSNLMTNL


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Setting up a Disinvestment ProceedsFundFormulating the guidelines for thedisinvestments of natural assetcompaniesPreparing a paper on the feasibility andmodalities of setting up of AssetManagement company to hold, manageand dispose the residual holding of thegovernment in the companies in whichgovernment equity has been

disin ested to a strategic partner

publicsectorenterprisesreforms2-121027095528-phpapp02.pdf

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