On PSU reforms, Modi govt is going where few govts dare to go today

And barely a fortnight ago, the state government identified another 12 PSUs for privatisation, disinvestment or complete closure.

In sync with this, about 20,000 employees have been relieved from 15 boards and corporations, hundreds of others are being transferred or are opting for alternative employment in state government departments8212;Rs 424 crore has already been shelled out as VRS.

Says Chief Secretary P K Lahiri: 8216;8216;Speeding up this process will bring in efficiency in the units that are merged or disinvested while loss-making units will cut losses.8217;8217;

Consider these:

8226; The Gujarat Film Development Corporation GFDC, Gujarat State Construction Corporation Limited GSCCL, Gujarat Communications and Electronics Limited GCEL, Gujarat Dairy Development Corporation, Gujarat Small Industries Corporation, and Gujarat Agro-Industrial Corporation Limited have been closed down after 98 per cent of their employees were given VRS.

8226; After 215 employees of the total 260 were relieved under VRS, Gujarat Tractor Corporation Limited has been taken over by Mahindra and Mahindra.

8226; Similarly, Adanis have taken over the Gujarat State Export Corporation which had 42 employees.

8226; Six PSUs are on the verge of closure including: Gujarat Industrial Investments Corporation, Gujarat Industrial Development Corporation, Gujarat Water Resources Development Corporation, Gujarat Mineral Development Corporation, Gujarat Tourism Corporation and Gujarat Slum Clearance Board. About 3,040 employees in these six PSUs have been given VRS worth Rs 96 crores. These PSUs are managing with skeletal staff right now.

8226; One of the biggest PSUs, the Gujarat State Textile Corporation, with 14,000 employees has been closed down after all were given VRS worth Rs 225 crore.

Additional Secretary Finance and in-charge of Bureau of Public Enterprises, A K Rakesh, says of the 26 PSUs identified for restructuring, loss-making units have either been closed down or have been privatised. 8216;8216;Privatising was a little difficult because a number of factors had to be considered. Like whether the new company can sustain losses initially and whether it can keep the company running or not. In case of Tractor Corporation and Export Corporation, the deals were good because known names like Mahindra and Mahindra and Adanis took them over,8217;8217; Rakesh said.

Sources in the Gandhinagar Secretariat say although the PSU restructuring policy was announced by the Gujarat Government way back in 1997 and 1999, the process has gathered steam only recently.

8216;8216;The restructuring process began around 2000 and in 2001, after the Modi government came to power, the CM asked officials to speed up things,8217;8217; a senior officer said. Says Rakesh: 8216;8216;It is a continuous process and more PSUs are being taken up for restructuring and the initiative has been revitalised.8217;8217; The latest resolution came on September 23 when the Finance Department sought to broaden the scope of restructuring the PSUs and joint-sector companies. The 12 companies on the reforms list include Gujarat State Finance Corporation GSFC, Gujarat State Fertiliser Corporation GSFC, Gujarat Narmada Valley Fertiliser Corporation GNFC, Gujarat Industrial Development Corporation GIDC, Gujarat Power Corporation GPC, Gujarat State Petroleum Corporation GSPC, Gujarat Mineral Development Corporation GMDC, Gujarat Agro-industries Corporation GAIC and Gujarat State Warehousing Corporation GSWC.

A four-member committee will study these PSUs and prepare a report on each one suggesting outright sale, part disinvestment, merger or public-private partnership. The committee includes former chairman of Gujarat Ecology Commission Hasmukh Shah as chief, economist Ravindra Dholakia, chairman of Gujarat Pollution Control Board K V Bhanujan and BPE in-charge A K Rakesh.

Shah, who is at present in Dubai, told The Sunday Express this week that his committee would examine the 12 PSUs and submit its recommendations on restructuring.

8216;8216;In fact, the committee has already completed the process of restructuring yet another PSU, the Gujarat Rural Development Corporation, and a report on it is ready. I8217;ll sign it as soon as I return from Dubai on October 10,8217;8217; he said.

Among the PSUs identified for the restructuring process, the GSPC, having net assets worth Rs 600 crore, with a profit of Rs 250 crore in 2003-04, is considered the bluechip currently engaged in large-scale oil exploration and distribution. The GMDC, GNFC and GSFC have also been making profits, while there are some PSUs like GIDC, GIIC and GSFC financial corporation and GAIC whose liabilities are reported to be more than their assets and who can either face merger or closure.