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Performance
Commercial

Report No. 30 of 2011 – Performance Audit of Revival of Sick Central Public Sector Enterprises

Date on which Report Tabled:
Thu 10 May, 2012
Date of sending the report to Government
Government Type
Union
Union Department
Commercial
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Sector Finance

Overview

Industrial sickness has far-reaching consequences on the economy of the nation which generally results in substantial loss of revenue to the Government, loss of production and productivity, large-scale unemployment and industrial unrest, undermining public confidence in the functioning of organised sector which in turn affects the overall investment climate of the country and increase of the non-performing assets (NPAs) of banks and financial institutions (FIs). Since funds get blocked in sick units, funding may not be available even for other good projects.

Central Public Sector Enterprises (CPSEs) were set up as the instrumentalities of the Government of India (GOI) to serve broad macro-economic objectives of state policy. As on 31st March 20111, out of a total of 406 CPSEs, 378 CPSEs were in operation, of which, 251 CPSEs earned a net profit of RS 1,27,141 crore whereas 127 CPSEs registered loss of RS 23,264 crore during 2010-11.As per the Public Enterprises Survey of Department of Public Enterprises (DPE), 45 CPSEs with accumulated losses of RS 63,828 crore were sick as of March 2010.

Keeping in view the inherent potential of the public sector, Government of India (GOI) has been making persistent attempts to overcome sickness through revival schemes for sick CPSEs. In fact, up to March 2010, GOI had approved revival schemes of 35 CPSEs at a cost of RS 39,658.72 crore.

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