MTNL, Air India To Shut Shop? Govt To Close Down Five Sick PSUs Soon

Admin 12-Mar-2015 15:04:22 Inothernews

MTNL, Air India To Shut Shop? Govt To Close Down Five Sick PSUs Soon


Air India and Mahanagar Telecom Nigam (MTNL) have joined a list of 65 sick public sector enterprises (PSUs) and the government plans to shut down five of them, as informed to the Lok Sabha on Wednesday. The list includes some of the best known state-run enterprises like and Hindustan Shipyard, HMT (Hindustan Machine Tools) apart from Air India and MTNL, according to a PTI report.



Minister of state for heavy industries Anant Geete said there were 65 units in the list of sick PSUs as of March 31, 2014.

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"The reasons for their sickness vary from enterprise to enterprise and included obsolete plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital," he said as quoted by The Economic Times.

The list of sick PSUs includes Scooters India, Hindustan Shipyard, ITI and Hindustan Cables. Geete did not name the other PSUs which are slated to be closed down.

A PSU is declared sick after it has accumulated losses in any financial year equal to 50% or more of its average net worth during four preceding years.

It is not clear as yet whether Air India and MTNL will be among the five PSUs that are shut down. In case of companies that are being closed, Geete said the government is offering their employees a "very good" VRS package.

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