Indian industry is experiencing slowdown the beginning of year 2000-2001, when an Year - on -Year growth of 5% was achieved. During the first eight months of the current financial year, a growth of 2.2% has been registered as against 6% registered during the corresponding period of last year. Manufacturing sector, which has a weight of nearly 80% in the overall Index of Industrial Production (IIP), has been worst affected by this slowdown.

The use based classification of industries also reveals dismal performance of all the industrial sector viz. basic goods, capital goods, intermediate goods and the consumer goods. Capital goods and the consumer non-durable, however have been the worst affected sectors among these categories of industries.

Production and growth rates in some of the industries being dealt by the Department during the period April –November, 2001 as compared to April-November, 2000 are given below :-

The Government has taken several policy initiatives to boost industrial production in the country. These measures have been targeted to improve competitiveness of Indian Industry in general and to boost aggregate demand, improve infrastructure base, upgrade technology, improve sentiments in the stock market and at encouraging FDI flows.

The auto industry which is the engine of the growth, has made tremendous improvement in terms of production and technology during the last few years. The turnover of the auto industry has been continuously on the rise from Rs.36,000 crore in 1998-99 to Rs.59,500 crore in 1999-2000. There was a decline of about 2% in 2000 –2001. In the current year 2001-2002, the auto industry is likely to achieve a turnover of Rs.55,431 crore.

The Department is in the process of finalising a comprehensive policy for further development and growth of Auto Sector in terms of both qualitative and quantitative aspects. The Department has also drawn up a long term plan for setting up of testing and certification facilities for the auto industry to enable the industry to meet environmental regulation and safety norms. The plan is to set up 6-7 such centres in different parts of the country involving an investment of about Rs. 750 crore.

The PSEs under the Department are engaged in manufacturing, consultancy and contracting activities. Out of 49 PSEs 15 made profits in 2000-2001 and remaining 34 made losses. The aggregate performance of 49 PSEs has been as under:

The loss is attributed to shortfall in production of some major enterprises owing to decline in demand, shortage of working capital, surplus manpower, obsolete plant and machinery, besides increase in the cost of inputs etc.

Details of production, profit/loss, order and Exports are given in Annexure-III, IV, VI & VII.

Salary/ Wage bill and social overheads as percentage of turnover is given at Annexure-V Paid up Capital, net worth and accumulated profit (+) /Loss(-) for PSEs of DHI is at Annexure-VIII.

The status of the 26 PSEs referred to BIFR is as under:

Strategies for restructuring the PSEs aim at revival of potentially viable PSEs, closing down PSEs which cannot be revived, bring down Government equity in all non-strategic PSEs to 26% or lower, if necessary, and fully protect the interests of the workers. In this process, follow action for restructuring of PSEs are in hand:-

• Revival of PSEs through the BIFR;
• Financial Restructuring wherever appropriate;
• Joint Venture formation to have continuous access to technology, finance, marketing, management etc;
• Manpower rationalisation;
• Closures is the last option.

Out of 49 PSEs, 26 have been referred to BIFR. In case of 12 PSEs, revival plans sanctioned by BIFR are under implementation. These revival plans involves fresh infusion of funds by Government of India to the extent of Rs. 637 crore and financial restructuring of Rs.2063 crore.

Apart from revival plans sanctioned by BIFR, Government on its own have approved restructuring plans in case of following 7 PSEs. The restructuring plans include financial, business and organisational restructuring involving fresh infusion of Rs.531 crore and financial restructuring of Rs. 1443 crore.

1. Hindustan Cables Ltd. (HCL)
2. Andrew Yule & Co.Ltd (AY & Co.)
3. Nepa Ltd, (Nepa)
4. Hindustan Paper Corporation Ltd. (HPC)
5. Praga Tools Ltd. (PTL)
6. HMT Ltd. (HMT)
7. Engineering Projects (India) Ltd. (EPI).

Some of the restructuring initiatives already taken include;

• Sale of Damodhar Cement & Slag Ltd., a subsidiary of Cement Corporation of India Ltd, (CCI) to M/s Associate Cements Co. Ltd. (ACC) in 1996.
• Sale of Yerraguntla Plant of CCI to India Cements Ltd. in 1998.
• Conversion of Belting Division of Andrew Yule & Co. (AY & Co. ) into a Joint Venture company in 1999 with M/s Phoenix of Germany as the joint venture partner holding 74% of the equity with balance of 26% with AY & Co.
• Conversion of Lagan Jute Machinery Co. Ltd. (LJMC), a subsidiary of BBUNL into a JV and transfer of management of the company to the JV partner in July, 2000.
• 28 PSEs have been taken up for disinvestment/JV formation.

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 52,000 employees opted for VRS during the eight year period 1992-93 to 2000 –2001 involving an expenditure of about Rs.1400 crore.

The Department has also been encouraging issue of bonds by PSEs against Government guarantee for meeting the expenditure on VRS. HMT raised Rs. 469 crore by issue of bonds and separated about 6700 employees under VRS. The other undertakings which have raised funds from the market are BHPV (Rs.15 crores), R&C (Rs. 8 crore). During the current year, Government has approved extension of Government guarantee enable IL to raise Rs. 35 crore for meeting the expenditure on VRS for separating 500 employees.

Government have been supporting viable and credible revival plans. There are some PSEs which were considered unviable by BIFR/Export Agency. Pesrmission of the Appropriate Authority was obtained and the undesrtakings of the following PSEs closed.

1. Bharat Process & Mechnical Engineers Ltd., (BPME)
2. Weighbird India Ltd. (WIL)
3. Tannery & Footwear Corpn. of India Ltd. (TAFCO).
4. Rehabilitation Industries Corpn. Ltd. (RIC)
5. National Bicycle Corpn. of India Ltd. (NBCIL)
6. Mining and Allied Machinery Corpn. Ltd. (MAMC)
7. Cycle Corporation of India Ltd. (CCIL).

Besides the seven PSEs mentioned above, unviable units of HMT Ltd., loss making refractory units and Jellingham Yard of Burn Standard Co. Ltd., (BSCL), Tangra Unit of Tyre Corporation of India Ltd., (TCIL) have been closed Consequent to the permission granted by the Appropriate Authority.

Government introduced a Voluntary Separation Scheme (VSS), providing benefits equivalent to VRS, in orders to minimise hardship to the employees of these PSEs . Benefits under VSS are much higher than the compensation under the ID Act. A total amount of Rs. 660 crore has been provided by the government as budgetary support for VRS/VSS for the PSEs in 2001-2002.

BHEL is one of the Navratnas. The Board of the Company has been strengthened by induction of qualified professionals from outside. Greater freedom has been given in respect of capital expenditure, formation of strategic alliances and formulation of HRD policies.

With a view to giving greater autonomy to the public sector enterprises, at the same time making them accountable for achievement of their objectives, for the year 2001-2002, MoU was signed by following 8 PSEs with Government of India.

1. Bharat Heavy Electrical Limited.
2. Bharat Bhari Udyog Nigam Limited (Holding Company).

Subsidiaries

1. Burn Standard Company Limited.
2. Bharat Brakes & Valves Limited.
3. RBL Limited.
4. Jessop & Company Limited.
5. Braithwaite & Company Limited.
6. Bharat Wagon & Engineering Co. Limited.
7. Bharat Process & Mechanical Engineers Limited.
8. Weighbird (India) Limited.
9. Braithwaite Burn & Jessop Construction Co. Limited,
3. Bharat Yantra Nigam Limited (Holding Company)

Subsidiaries

1. Bharat Heavy Plate & Vessels Limited.
2. Bharat Pump& Compressors Limited .
3. Richardson & Cruddas (1972) Limited.
4. Triveni Structurals Limitesd.
5. Tungabhadra Steel Products Limited.
6. Bridge & Roof Co. (India) Limited.
4. Hindustan Cables Limited.
5. Andrew Yule & Company Limited.
6. Engineering Projects (India) Limited.
7. HMT Limited (Holding Company).

 

Subsidiaries

1. HMT Machine Tools Limited
2. HMT Watches Limited.
3. HMT Chinar Watches Limited.
4. HMT (I)
5. HMT(B)
8. Hindustan Paper Corporation Limited.

Subsidiaries

1. Hindustan News Print Limited.

In all, a total of 27 PSEs out of 49 PSEs under DHI are covered by MoU.