by Harish Gupta, National Editor, Lokmat Group
Exclusive story
Piyush Goyal plans MMTC, STC & PEC Merger
After banks PSUs merger on the anvil
PSUs accummulative losses cross Rs 2 lakh crores
Harish Gupta
New Delhi, Aug. 31
After the merger of banks, the government is working on a war footing basis to merge loss making flagship State Trading Corporation (STC) with MMTC. Even the PEC may be brought under the mega merged PSU.
It is authoritatively learnt that Railways & Commerce Minister Piyush Goyal held a marathon meeting with the bankers and top officials a couple of days ago to to merge the three entities.
The MMTC, STC and PEC under the Commerce Ministry are dealing with imports and exports of goods and created in the 50s & 60s. The STC and PEC have been making huge losses year after year. However, the MMTC has been making profits.
With PM Modi telling the ministers handling economic ministries to shut down all loss making PSUs or re-structure them, Piyush Goyal has initiated move to merge the three entities. The NITI Aayog had also rang the alarm bells by telling the government that of the 300-odd PSUs of the Central government, 188 are loss making and their accummulative losses have crossed Rs 2 lakh crores. These loss making PSUs include Air India, BSNL, MTNL, STC, IIFC, Hindustan Photo etc. Ever since Modi government came to power in May 2014, it shut down only two sick units out of 188. Of course, consolidation process is on in banks. But other ministries are moving at a snail's pace and failed to take worthwhile steps.
It is in this background that Piyush Goyal has taken a major initiative to merge the three entities which have been exporting & importing goods. In a way, they are involved in same kind of business. In fact, his predecessor, Suresh Prabhu had initiated the process the process of merging of these canalizing agencies. But he couldn't move his finger.
MMTC used to work as a canalizing agency for import and export of non-ferrous metals and fertilizers. Similarly, STC was a canalizing agency for imports of essential items of mass consumption such as wheat, pulses, sugar and edible oils. The PEC deals with engineering goods
In 1989-90, these three companies were put under the one company called the Bharat Business International Ltd (BBIL), to prevent cross-competition. But the bureaucracy failed that experiment. Now it has been decided all these be merged into a single entity.
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