Closure of Air India, MTNL and other PSUsBusiness News

March 10, 2015 12:39

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Government has decided to shut 65 sick PSUs. The decision of Heavy Industries Minister was announced in Lok Sabha on Tuesday. The PSus include some of the best known state-run organizations like Air India, MTNL, Hindustan Shipyard and HMT units.

Anant Geete, Heavy Industries Minister said during ‘Question hour’ that their employees were being offered a very good VRS (Voluntary Retirement Service) package.

Once market leaders, Air India and MTNL in aviation and mobile telephone sectors respectively were declared sick as per the criteria for a PSU. They incurred losses worth more than 50 percent of their average net worth in previous four years.

The Minister said there were 65 units in the list of sick PSUs as of March 31 last year.

The reason behind closing these 65 PSUs varied from enterprise to enterprise.

Ideal plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital were some of the reasons, he said.

Geete said the concerned administrative ministries "prepare proposals for revival or otherwise of sick companies on case to case basis and obtain approval of the government."

According to the figures tabled in the House, Air India accumulated losses of Rs 5388 crore, Rs 5490 crore and Rs 7559 crore in 2013-14, 2012-13 and 2011-12 respectively, while MTNL showed profit of Rs 7820 crore in 13-14 but had incurred losses of Rs 5321 cr and Rs 4109 cr in the previous years.


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PSUs  Air India  MTNL  shut down