The Department holds interactions with Industry Councils and evolves plans for growth of the various segments of Industry. It assists industry through input support, resolution of problems relating to technological collaboration & upgradation, Research & Development, etc.

    48 operating PSEs under the administrative control of the Department are engaged in manufacturing of engineering/capital goods, consultancy and contracting activities. The total investment (Gross Block) in 48 enterprises was about Rs. 7595 crore till March 1999 and they employed about 1.77 lakh persons. The Department is also concerned with the affairs of Maruti Udyog Ltd. These enterprises produce a wide range of products ranging from machine tools, industrial machinery, boilers, gas/steam /hydro turbines, turbo generators, railway traction equipments, pressure vessels, AC locomotives, prime movers, electrical equipment & agricultural tractors to consumer products, such as, scooters, leather goods and watches.

    There is close interaction with PSEs to monitor their performance. The Department also serves as an interface between these enterprises and agencies of the Government. It thus helps establish long term linkages with customers. It intervenes to formulate corporate policies, improve the order book position and ensure timely supplies to core sector customers.

    The Department encourages restructuring of the public sector enterprises, where necessary to improve their efficacy. The Department pursues the possibility of promoting of Joint ventures (JVs) in appropriate cases with suitable partners to improve their technological and market orientation. Consultants are appointed to advice on corporate restructuring and removal of constraints. The Department arranges Plan and Non-plan budgetary support for the PSEs in consultation with Ministry of Finance and Planning Commission.

    Public Sector Enterprises function under the Companies Act, and the guidelines laid down by the Department of Public Enterprise. The Department is committed to the goal of effective and responsive administration towards which the following steps have been taken:

1. Computerised Information and Facilitation Counter has been set up for providing necessary information to the general public.
2. A Joint Secretary specifically attends to redressal of public grievances in time.

    The Department acts as a nodal agency for all PSEs and assists in policy formulation pertaining to the role of PSEs in the economy. It lays down policy guidelines on performance improvement and evaluation, financial accounting, personnel management and in related areas. It also collects, evaluates and maintains information on several areas in respect of PSEs. In fulfilling its role, it associates itself with other Ministries and organisations.

    The important role and tasks of the Department are listed below:

1. General policy relating to Public Sector.
2. Matters relating to issue of Presidential Directives and guidelines to Public Sector Enterprises.
3. Formulation of policy guidelines pertaining to Public Sector Enterprises in areas like performance improvement and evaluation, financial management, personnel management, Board structures, wage settlement, training, industrial relation, vigilance, performance appraisal, etc.
4. Matters relating to reservation of posts in the public sector enterprises for certain classes of citizens.
5. All matters relating to Memorandum of Understanding between the Public Sector Enterprises and the administrative Ministries Departments.
6. Matters relating to delegation of powers to Board of Directors.
7. To undertake in-depth studies in respect of significant areas of functioning of Central PSEs.
8. Matters relating to International Center for Promotion of Enterprises (ICPE).
9. Matters relating to Standing Conference of Public Enterprises (SCOPE).
10. To monitor and evaluate the performance of PSEs and to act as a repository of data and to bring out an annual survey for the Parliament.
11. Permanent Machinery of Arbitrators for settlement of disputes among public sector enterprises and Government Departments except disputes relating to tax matters.

    The Department has five constituents Division: the Financial Policy Division, the Management Policy Division, the MOU Division, the Administration & Coordination Division and Permanent Machinery of Arbitration. The Financial Policy Division comprises the Public Enterprises Survey unit, the policy planning unit, and the wage policy unit. The Management Policy Division comprises the personnel policy unit, training unit, performance indicator and work norms unit (PIWN Unit) and SC & ST Cell. The MOU Division comprises MOU Unit, Data Bank and Computer Cell. The Administration & Coordination Division comprises the Administration, Library, Parliament and Coordination Wings and Hindi Cell. The Permanent Machinery of Arbitration (PMA) provides a forum for settlement of commercial disputes between two or more PSEs as well as between a Government Department and PSEs.

2. Industrial Scenario

(i) Overall growth in industrial production during 1999-2000 was recorded as 8.1% based on the latest index of Industrial Production. During the period April-July 2000-01, overall growth rate of industrial production was 5.4% as compared to 5.9% during the same period in the previous year.

(ii) At the sectoral level, growth rate in April – July, 2000 in case of ‘Manufacturing’ sector was 5.7% as compared to growth rate of 6.7% in the previous year. While the overall Capital Goods sector recorded a marginal decline of 0.3% during the period April-July, 2000, some of the industrial sectors which have recorded positive growth during this period are Machine Tools (+5.36%), Boilers (+12.58%), Earth Moving Equipment (+14%) and Transformers (+69%) as per details given in Annexure – I.

(iii) The automotive industry comprising of the automobile and the auto component sectors has shown great advances since delicensing and opening up of the sector. The turnover of the automobile industry was Rs.44,338 crores in 1999-2000 compared to Rs.36000 crore in 1998-99, registering a growth of 23.11%. The turnover of the auto component sector during 1999-2000 is estimated to be in the order of Rs.15,200 crore compared to Rs.12683 crore during 1998-99, registering a growth of around 20%. The growth in production of automobiles during 1999-2000 over 1998-99 is 15%. The industry provides direct employment to 4.5 lakhs and generates indirect employment of 1 crore. Performance of the Auto sector is given in Annexure – II.

(i) There are 235 operating Central PSEs which are involved in manufacturing of steel, mining of coal and minerals, refining crude oil, manufacture of heavy machinery, power equipment, paper, cement etc. The overall scenario and some of the major steps taken by the Govt. to improve their performance are highlighted below. During the year 1998-99, 127 PSUs earned profit of Rs.22509 crore, 106 incurred a net loss of Rs.9274 cr. and 2 PSUs neither earned profit nor incurred loss. The overall net profit during the year 1998-99 was Rs.13235 crore.

Brief details of some other select parameters for CPSUs during 1998-1999 compared to 1997-1998 are as under :

(Rs. Crore)

(ii) 11 Public Sector Companies have been identified as Navratnas and given enhanced powers. These enterprises are BHEL, BPCL, GAIL, HPCL, IOC, IPCL, MTNL, NTPC, ONGC, SAIL & VSNL. These Navratna PSUs have earned a net profit of Rs.12073 crore during 1998-99. The autonomy is granted in the area of incurring capital expenditure, entering into joint ventures, effecting organisational restructuring, creation and winding up of posts below Board level, to raise capital from the domestic and international markets and to establish financial joint ventures subject to equity investments with specified limits.

(iii) Of the 52 Central sick PSUs, BIFR have sanctioned revival scheme for 20 PSUs. 9 sick PSUs have earned profit during 1998-99.

(iv) Government have improved upon the earlier VRS scheme and introduced a new scheme of VRS, which was notified on 5.5.2000. Some of the major features of the new scheme include flexibility to the profit making PSUs to offer compensation upto 60 days for each year of service rendered by an employee. In case of marginally profit making/loss making PSUs, the scheme offers compensation on the Gujarat pattern i.e. 35 days for each year of service rendered plus 25 days for each of service left.

(v) The MOU system has grown at a steady rate. The number of MOUs signed have grown from 4 in the year 1987-88 to 106 for the year 2000-2001. The MOU system is a freely negotiated document between the Government as the owner and a specific PSE. It is supposed to clearly specify the intentions, obligations and mutual responsibilities of both parties. Further, MOU makes an attempt to move the management of PSEs from management by controls and procedures to management by results and objectives. In other words, MOU makes an attempt to move the management of PSEs from reliance on ex-ante controls to a system of ex-post controls. The MOU is signed by the Chief Executive on behalf of the PSE and by the Secretary of the Administrative Ministry on behalf of Government.

4. PSEs under the Department of Heavy Industry (DHI)

(i) The Department of Heavy Industry has under its administrative control 48 operating public sector undertakings. Besides, there are two holding companies, namely Bharat Bhari Udyog Nigam Ltd. (BBUNL) and Bharat Yantra Nigam Ltd. (BYNL). These enterprises operate in diverse fields ranging from sophisticated Engineering equipments to consumer goods and offer products such as machine tools, Industrial machinery, boilers, Gas/Steam/Hydro Turbine, Generators, Railway traction equipment, pressure vessels, prime movers, bicycles, salt, shoes, etc. The total investment in these enterprises has been to the tune of Rs.7595 crores (Gross Block) till March , 1999 and they directly employ about 1.77 lakh persons. An aggregate production of Rs.11256 crore was achieved (Ann – III) by these undertakings during the year1999-2000 (as per flash results).

(ii) Out of these 48 operating PSEs, 13 made profits and remaining 35 made loss in 1999-2000. The flash results for the year 1999-2000 show an aggregate net loss of Rs.739 crore against the loss of Rs.411 crore in 1998-99. These PSEs have targeted to reduce the aggregate loss to Rs.351 crore in 2000-2001(ANN-IV). The main reasons for the losses are shortfall in production, lack of orders, shortage of working capital, surplus manpower, obsolete plant and machinery and increase in the cost of inputs.

(i) Strategies for strengthening and improving the performance of PSUs include:

- Revival through BIFR,

- Financial restructuring wherever appropriate,

- Joint Venture formation by induction of partners capable of providing technical, financial and marketing inputs,

- Manpower rationalisation including introduction of Voluntary Separation Scheme (VSS) in unviable PSUs,

- Closure as the last option.

(ii) 27 PSEs are sick and referred to BIFR. Revival plans have already been sanctioned in case of 12 PSEs and these are under implementation. These revival plans involve fresh infusion of funds by Govt. to the extent of Rs.637 crore in addition to financial restructuring of Rs.2063 crore Details are attached at Ann – V. The progress of implementation of rehabilitation packages is being monitored closely so as to achieve the objective of taking these companies out of sickness. Scooters India Ltd. (SIL) has come out of the purview of BIFR as it has been making profit for the last 3 years.

(iv) Apart from revival plans sanctioned by BIFR, Govt. on its own has also approved restructuring in the following PSUs involving financial/business restructuring etc.

1. Hindustan Cables Ltd. (HCL)
2. Andrew Yule & Co. Ltd. (AYC)
3. Nepa Ltd. (Nepa)
4. Hindustan Paper Corpn. Ltd. (HPC)
5. Praga Tools Ltd. (PTL)
6. HMT Ltd. (HMT)

• Financial restructuring was carried out in case of HCL to reduce the burden of repayment of principal and interest liability. In addition, orders have been reserved for HCL by MTNL/DOT for 2 years (30% in the first year and 25% in the second year).
• In case of AY & Co., restructuring was done as a turnaround strategy involving business and financial restructuring.
• Disinvestment Commission with regard to Nepa Ltd. had recommended for strategic sale after minimal financial restructuring.
• Additional funds were provided as equity in PTL towards reimbursement of cash losses and payment of statutory dues.
• Financial Restructuring was done for HPC to improve the company’s viability and to offset locational disadvantages.
• Turnaround plan, approved by Govt. on July 18,2000 for HMT, having plants located in 9 States, addresses all the major problems which beset the Company, namely, high manpower costs, high interest burden and perennially loss making unviable units. Besides, organisational and financial restructuring, Govt. has also approved infusion of funds of Rs.265.10 crore during 2000-01.

Thirteen (13) PSUs of the Department have been referred to Department of Disinvestment for locating JV partners. These PSUs are RBL Ltd., Calcutta (RBL), Instrumentation Ltd., Kota (ILK), Bharat Brakes and Valves Ltd. , Calcutta, (BBVL), Bharat Leather Corporation, Agra (BLC), Scooters India Ltd., Lucknow (SIL), Bharat Pumps and Compressors Ltd., Allahabad (BPCL), Hindustan Salt Ltd., Jaipur (HSL), Tungabhadra Steel Products Ltd. , Hospet (TSPL), Jessop, Calcutta (JCL), Hindustan Cables Ltd. , Calcutta (HCL), NEPA Ltd., Nepanagar, Praga Tools Ltd. (PTL) and National Industrial Development Corporation Ltd., New Delhi (NIDC).

(vii) Voluntary Retirement Scheme (VRS) has been introduced in a number of PSEs of this Department to shed surplus manpower without causing undue hardship to the workers. About 38,500 employees opted for VRS during seven-year period 1992-93 to 1999-2000 involving an expenditure of about Rs.750 crores.

(viii) There are some PSUs which have been considered unviable by BIFR/Expert Agency. Govt., after considering various options, has decided to take action for closure and as a safety net, Voluntary Separation Scheme (VSS) has been introduced in the six unviable PSUs namely, Mining and Allied Machinery Corporation (MAMC), Durgapur; National Bicycle Corporation of India Ltd. (NBCIL), Mumbai; Bharat Process and Mechanical Engineers Ltd. (BPMEL), Calcutta; Tannery and Footwear Corporation Ltd. (TAFCO), Kanpur; Weighbird India Ltd. (WIL) and Rehabilitation Industries Corporation (RIC), w.e.f. 1.9.2000 for a period of two months. VRS benefits under VSS are substantially higher than the compensation available under ID Act in the event of winding up/closure.

In one other case of Mandya National Paper Mills Ltd. (MNPM), permission of the appropriate Govt. has been received on 5.9.2000 for closure of the Unit. 639 employees out of a total of 651 employees have opted for VSS and all their dues have already been settled.

6. Memorandum of Understanding (MOU)

With a view to giving greater autonomy to the Public Sector Undertakings and at the same time making them accountable for achievement of their objectives, MOU is being signed with select companies. For the year 2000-2001, 8 enterprises of this Department, namely Bharat Heavy Electricals Ltd. (BHEL), HMT Ltd. (HMT), Andrew Yule & Co. (AYC), Hindustan Cables Ltd. (HCL), Bharat Bhari Udyog Nigam Ltd. (BBUNL), Engineering Projects (India) Ltd. (EPI), Hindustan Paper Corpn. Ltd. (HPC) and Bharat Yantra Nigam Ltd. (BYNL) have signed Memorandum of Understanding with the Govt.

(Nos.)

WELFARE OF MINORITIES

    Public Sector Enterprises of this Department are highly conscious of their obligations to promote the welfare of minorities in the light of Government's directives on this subject. Instructions issued by the Govt. in respect of reservation in appointment/promotions for SC/ST/OBC, handicapped persons and minority communities have been generally followed by the PSEs of the Department. The work force in the PSEs consists of a large number of persons from different minority communities like Sikhs, Christians, Muslims etc. Their integration into the mainstream workforce is complete in all PSEs and there is no discrimination on account of their creed or religious beliefs. Various steps have been taken to impart training in different vocations and technical skills to the employees from the minority communities and their dependents. In terms of facilities like residential accommodation etc. all employees are treated at par.

    Every year Qaumi Ekta/Sadbhavna Diwas is organised where people from all sections of the society including women and children participate to simulate the spirit of oneness, national integration and harmony.