Putting disinvestment on hold and in a bid to please the Left about its commitment to public sector enterprises, the UPA government set up the Board for Reconstruction of Public Sector Enterprises (BRPSE) to examine the prospects of reviving the 75-odd sick Central PSUs. Three years on, with the Board recommending thousands of crores in write-offs and fresh loans to revive all but one of the 52 PSUs it examined, the government has had enough. Citing the Department of Public Enterprises’ “unwillingness” to support the BRPSE, Board chairman Prahlad K Basu resigned last week in a letter unusually marked not just to the Minister of Heavy Industries and Public Enterprises (MoHIPE) Santosh Mohan Deb but also Congress president Sonia Gandhi, Prime Minister Manmohan Singh, AITUC president Gurudas Dasgupta, CPM leader Sitaram Yechury, Lok Sabha Speaker Somnath Chatterjee and 15 Cabinet ministers.A top MoHIPE official, however, told The Indian Express that Basu had not resigned but was actually given marching orders on November 23. “It was a government decision. Unfortunately, Basu had not been able to work with any of the five secretaries we appointed to the Board. In any case, the Board has eight to nine distinguished people from different walks of life and cannot be seen as a one-man show,” the official said.Declining to comment on Basu, Deb told The Indian Express: “We have already appointed a new chairman to take over, Dr Nitish K Sengupta, a former revenue secretary who had also been a Member of Parliament for some time.” Ministry officials said that Sengupta, a Trinamool Congress MP, will join office this Friday.Meanwhile, Basu criticized the Ministry. “The ministry is full of rent-seekers and if reforms were to take place, their rents would evaporate,” he said. Incidentally, of the 52 PSUs the BRPSE looked at, just one was recommended for closure (Durgapur-based Bharat Opthalmic Glass) and induction of strategic partners was recommended for seven. The standard BRPSE recommendation for the rest of the 44 ailing PSUs was a combination of loan write-offs, interest waivers and fresh capital induction running into thousands of crores, with little change in the fundamental business model.For instance, the Board recommended a bailout package of over Rs 800 crore for Tyre Corporation of India (TCIL) that has been defunct for over 15 years, mooting the idea that the unit could enter the aircraft-tyre market as the rest of the domestic tyre market was highly competitive. The idea was to induct a joint venture partner later. However, stressing that the government need not be in the business of making tyres at all, the Cabinet asked a Committee of Secretaries to look into it, following which it cleared a bill to divest its ownership in TCIL. The Bill had got the nod from the parliamentary panel examining it in August. While Basu stresses that most of the Board’s recommendations were cleared, he was unhappy with the delay. “Our recommendations on TCIL were cleared after two years. Why should there be such long delays in implementation?,” he asked. Incidentally, on the one PSU that the Board recommended for closure, Basu says, “In hindsight, I think I made a mistake. The ophthalmic glass plant in Durgapur could have been revived.”
