The government is determined to cut losses and resort to a massive divestment program. One of the main reasons for ruthlessly divesting OPSUs is their mounting losses.
According to a latest analysis submitted to the government by the ministry to the PMO, of the 256 operating PSUs as on March 31, 2020, the loss-making PSUs stood at 84. The number rose from 72 in 2017-18.
Even the losses of these PSUs are mounting, year after year. If the losses were Rs 18599 crores in 2017-18, the amount went up to Rs 28404 crores in 2018-19 and further went up to Rs 30131 crores. Surprisingly, despite the best efforts of the government, there are as many as 30 PSUs which are continuously making losses.
Between August 2013 and March 2020, the government approved the closure of 21 loss-making CPSEs including HMT Watches Ltd, Indian Drugs and Pharmaceuticals Ltd and Hindustan Fluorocarbons Ltd. The Department of Public Asset Management (DIPAM) has failed to find strategic investors for Scooters India Ltd. and Bharat Pumps and Compressors Ltd even after inviting expressions of interest. Alternatively, the government is selling these sick as well as profit-making PSUs too. There are many under litigation too.
Of the 84 sick companies, nine are in Maharashtra which includes Western Coalfield, Bharat Petro Resources, HOC, Hindustan antibiotic, Maharashtra antibiotics, Aurangabad Textiles & Apparel, NDFC, Hotel Corporations, and Indian Ports Global.
Goa's Goa Antibiotics & Pharma Ltd is also sick which made a loss of Rs 543 lakhs in 2019-20
It is not the government only shutting down PSUs. On the contrary, the government has also cleared the path for the revival of eight CPSEs including BSNL, MTNL, Brahmaputra Valley Fertilizer Corp. Ltd, Hindustan Steelwork Construction Ltd, Konkan Railway Corp. Ltd, and revive four closed fertilizer plants at a massive investment of Rs one lakh crores.