Financial Daily from THE HINDU group of publications
Friday, Jul 01, 2005
Industry & Economy
Cabinet panel for one-time infusion of funds in 3 PSUs
Mony K. Mathew
Thiruvananthapuram, June 30
THE Cabinet sub-committee entrusted with the task of reviving the loss-making public sector units in Kerala has recommended one-time infusion of funds in respect of three units.
The sub-committee, constituted after winding up Enterprises Reforms Committee (ERC) that had done elaborate studies of the units, has begun the process with Scooters Kerala Ltd., Kerala Garments Ltd. and Metal Industries Ltd.
The infusion of funds has been recommended for purposes such as capital enhancement, working capital requirements, clearing of dues of retired employees and repairs and maintenance of plant and machinery.
In the case of Scooters Kerala, the assistance is to the tune of Rs 40.16 lakh, while it is Rs 52.47 lakh for Kerala Garments and Rs 27 lakh for Metal Industries, according to sources in the Industries Department.
The erstwhile ERC had taken up 45 units for detailed studies and had worked out revival packages for many of them even while recommending closure of some units. The Government had taken decisions, based on the recommendations, in regard to 30 units when ERC was abruptly wound up.
The Cabinet sub-committee had been formed to look into the possibility of rehabilitating the units with one-time infusion of funds wherever it is feasible. It meant that the decisions taken by the Government earlier in line with the ERC recommendations stand nullified.
Till May this year, the Government had extended financial assistance to the tune of Rs 33.97 crore to six units out of the year's budgetary allocation. The units are: Kerala Electrical and Allied Engineering Company (Rs 3.48 crore); Traco Cable Company (Rs 5.21 crore); Kerala Construction Components Ltd. (Rs 30,000); Kerala State Electronics Development Corporation (Rs 17.89 crore); Chittur Cooperative Sugars (Rs 7.37 crore) and Scooters Kerala (Rs 1.48 lakh).
After providing for these units, the remaining amount in the budgetary allocation for PSUs is only Rs 16.03 crore, the sources said.
Since 1996-97 and till 2004-05, the Government had given a total of Rs 579.56 crore to the PSUs as assistance. Besides, more than Rs 252 crore had been given out as loans to the units out of the sale of bonds floated by Kerala Industrial Revitalisation Fund. These bonds are to be redeemed in 2005, 2006 and 2007.
These apart, the Government had spent Rs 135 crore for voluntary retirement of 5,343 employees in various units since 1994. It also incurred an expenditure of Rs 260 crore towards settlement of PSU dues to banks and financial institutions.
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