Sick PSUs look forward to capital infusion

Sick public sector undertakings (PSUs) that are wading through their accumulated loss are now looking forward for capital infusion from the government for a thorough course correction.

A majority of the 40 companies under the Department of Industries and Commerce that were facing the threat of extinction for want of professional management, scrutiny, audit, and other lapses over the years were brought on track and 14 units have turned around too. Still, 26 ailing units call for urgent intervention. The posts of chief executive officers and a number of significant middle-level positions continue to remain vacant in some PSUs.

The Public Sector Restructuring and Internal Audit Board has identified the posts and seeks to expedite recruitment. It has also informed the government that paucity of workmen in some companies has led to overtime assignments, resulting in a surge in wage bills.

Some units were still unable to make the statutory Employees’ Provident Fund (EPF), Employees’ State Insurance (ESI), gratuity, and pension contributions owing to low revenue generation. Occasional grant of working capital through the Plan fund is used to meet such commitments.

A one-shot capital infusion is imperative for reviving the textile sector. All textile mills are incurring loss and the Kerala State Textile Corporation tops the list. The Corporation’s turnover increased from ₹9.73 crore in 2016-17 to ₹32.13 crore in the past year, but the loss also grew from ₹29.36 crore to ₹31.60 crore. Sitaram Textiles and other units too share the same plight.

Panel recommendation

An expert committee headed by P. Nandakumar had mooted a one-time fund infusion of ₹494.81 crore — ₹317.89 crore for capital investment, and ₹176.93 — crore as working capital for putting the 17 mills in the State back on track.

The recommendation for one-time investment assumes significance as ₹521.09 crore granted in fits and starts during the past one decade had not done any good to the industry.

The 17 mills, in the public and cooperative sectors, offer direct employment to 5,000 and indirect employment to 15,000 people. The government had approved the report, but the uncertainty in releasing funds has halted the revival process.

Bureaucratic wrangles have to be cleared for implementing the proposals for which administrative sanction and Plan allocation have been accorded, sources said.