NITI Aayog working to fast-track closure of underperforming CPSEs

A NITI Aayog oversight committee is working to fast-track the closure of underperforming central public sector enterprises (CPSEs) to tackle mounting losses incurred by these entities.

If the committee finds that the board members have been delaying the process of closure, the body would suspend the board of such loss-making enterprises, according to an Economic Times report.

These measures are part of the government's revised guidelines on time bound closure of sick and loss-making CPSEs and disposal of their movable and immovable assets. The policy think tank has been tasked with preparing a roadmap for ailing public sector undertakings.

“Niti Aayog will monitor that the decision is implemented within a set time frame and the administrative ministries may approach the Aayog for resolution of any dispute related to sale of any moveable assets,” an official told the paper.

The government has identified around 30 CPSEs for closure and the Cabinet has given its nod for closing down seven of the sick enterprises. These include Hindustan Cable, Tyre Corporation, HMT Watches, Birds Jute and Export Limited (BJEL) and Central Inland Water Transport Corporation.

Under existing guidelines, within three months of initiating a cabinet proposal to close a CPSE, the firm has to present an estimate of all dues.

As of now, there has been no strategic sale of any loss-making CPSEs.

The government has directed ministeries to negotiate with creditors to settle their dues at minimum value mostly through a one-time settlement.

Niti Aayog will further develop a framework for such resolutions, the official said.

The government plans to sell large areas of land that are owned by these CPSEs. They plan to work out a reserve land price on the basis of land prices in nearby areas over the past three years and hold e-auctions. According to the report, state-run MSTC will be appointed as the auctioning agency.