The Hindu : Business : New board for revival of sick units

Online edition of India's National Newspaper
Thursday, Nov 04, 2004

Business

Business

New board for revival of sick units

By Our Special Correspondent

NEW DELHI, NOV. 3. The Cabinet Committee on Economic Affairs (CCEA) today cleared the establishment of a Board for Reconstruction of Public Sector Enterprises meant to consider ways and means to revive sick public sector undertakings. According to the Finance Minister P. Chidambaram, the board will have seven members and a non-official member as the chairman.

He told reporters after the CCEA meeting that the board would include three non-official members and three Secretary-level officials. The board, which would examine the reconstruction and revival proposals of sick PSUs, would have an advisory role, he said.

The board's terms of reference include advising the Government on ways and means to strengthen public sector undertakings in general and making them more autonomous and professional. It will also consider restructuring — financial, organisational and business (including diversification, joint ventures, mergers and acquisitions) — of Central Public Sector Enterprises and suggest ways and means for funding such schemes. In addition, it will examine the proposals of the administrative ministries for revival or restructuring of sick or loss making CPSEs for their turnaround.

An official release says, it will advise the government on disinvestment, closure or sale in full or in part in respect of chronically sick or loss making companies which cannot be revived. In respect of these unviable companies, the board will also advise the Government about sources of funding.

Finally, it will monitor incipient sickness in CPSEs and advise the Government on such other matters as may be assigned to it by the Government from time to time.

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