Southern States
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Karnataka
Ten Karnataka PSEs identified for closure
By B.S. Ramesh
BANGALORE, DEC. 5. The Public Sector Restructuring Commission (PSRC), which was set up by the Karnataka Government to study and evaluate public sector enterprises (PSEs) in the State, has almost completed its task.
Sources in the Government said the commission would give its final report on PSEs by January end. The commission, among other things, has recommended that the Government disinvest from non-core PSEs, privatise others, close down loss-making ones, and restructure a few others.
The commission was constituted by a Government Order on March 15, 2000 to suggest a list of PSEs for closure, restructuring, merger, disinvestment, privatisation or rationalisation of employment and operations.
Incidentally, the State Government had evolved a comprehensive policy on public sector reforms and privatisation of PSEs. The Government committed itself to implementing the policy by March 2005 and decided to close down at least ten PSEs in the first phase by the end of March 2002. The ten PSEs slated for closure have been identified by the PSRC.
The commission found that these PSEs no longer served the purpose they were set up for, or were causing a huge drain on the State exchequer.
The 15 PSEs which were to be evaluated by the PSRC were Karnataka Telecom, Mysore Lamp Works, New Government Electric Factory (NGEF), Mysore Acetate and Chemicals, Mysore Electrical Industries (MEI), Chamundi Machine Tools, Karnataka Soaps and Detergents Ltd. (KSDL), Mysore Paper Mills, Mysore Match Company, Karnataka Vidyuth Karkhane, Mysore Cosmetics, Karnataka State Construction Corporation, Karnataka State Electronics Development Corporation, Karnataka State Textiles Corporation and Karnataka Agro Proteins.
The PSRC evaluated all except one of the 15 companies, and reports on each PSE was submitted to a high-power committee chaired by the Chief Secretary.
In turn, the high-power committee will submit the recommendations to the Cabinet for consideration through he respective administrative department.
Sources said that the Commission expects to complete the study and evaluation of one more PSE by the year end.
Apart from its PSE-wise evaluation, the PSRC has recommended a series of measures aimed at protecting the interest of PSE employees who have opted for voluntary retirement Scheme (VRS).
It has suggested the creation of a social security net for employees of PSEs who have been granted VRS. The net would provide adequate support the employees after they left the PSEs.
Some of the other recommendations include the payment of severance pay to employees of PSEs who are not eligible for VRS, setting up of a rationalisation fund from the proceeds of the sale or disinvestment of the PSE and modalities of dealing with the assets and liabilities.
The sources said the commission had elicited the views of the managements of the PSEs, the departments that they come under, and the employees before finalising the report.
Whatever the status of the PSEs which were examined, the commission placed emphasis on providing adequate relief to the employees, apart from protecting their interests.
After the commission completes its industry-related analysis, it is expected to take up evaluation of PSEs working in the service sector.
However, the restructuring, privatisation or closure of the PSEs will be executed in accordance with the detailed procedures prepared by the PSRC.
The tenure of the PSRC, which was to expire on September 30, 2001, has been extended till March 31, 2002.
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