The Telangana State Government, is planning to deprive its stake in loss-making and non-functional state public sector undertakings (PSUs).

This move enables to prevent further losses and to mobilize funds for various welfare and development programmes.

As most of the PSUs are running in deep losses, the Government wants to put its stake up for sale to private parties, who can revive the units. Additionally, the Government, also wants to set up a disinvestment commission, to frame guidelines for disinvestment.

The Telangana Government, has about 66 PSUs, of which 11 working PSUs pertain exclusively to Telangana, and 33 PSUs are under demerger, following the bifurcation of the State in June 2014. The other 22, are non-functional PSUs, which are yet to be bifurcated.

The Comptroller and auditor general (CAG) of India, in its latest report, recommended, that, “Since non-functional PSUs are not contributing to the state economy and not meeting intended objectives, these should either be closed down or revived.”

The total investment of the Government in these PSUs, has been fixed to be around Rs 60,233 crore. However, in 2010, the Government’s investments in working PSUs were worth Rs 7,700 crore, which has now increased to Rs 17,594 crore.

The 11 working PSUs, which function for Telangana, have experienced an aggregate loss of Rs 351 crore, and only one PSU, declared a dividend of Rs 129 crore. The 33 PSUs, under demerger, sustained a total loss of Rs 444.12 crore; four PSUs declared a dividend of Rs 16.19 crore.

The Government has asked the industries department, to consider and work out the CAG’s recommendation, on closure or the revival of sick units.

The industries department, following this, has suggested putting the Government stake in these PSUs.

An official in the industries department, “Operating the sick units is a drain on the state exchequer. To prevent further losses and to revive the units, a stake sale looks like a good option. The CAG too recommended the same.”

By Supraja