Difference between revisions of "Central Public-Sector Undertakings"
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| + | Central Public-Sector Enterprises (CPSEs) include firms that are registered under Companies Act, 2013 and in which the Central Government holds more than 50% of the equity. Banking institutions and insurance companies are excluded from the definition of CPSEs. Railways, Defence and Ports are undoubtedly the largest public-sector entities and occupy vast parcels of land, but they have not been included in this section. As on 31st March 2017, there were 331 CPSEs. The CPSEs have their presence in a variety of sectors which includes and is not limited to Petroleum, Power, Steel, Mining and Transportation. CPSEs have monopolistic or a dominant position in these sectors. They also operate in competitive markets such as automobiles, textiles, telecommunications, information technology, etc. where private players have made significant inroads and have increasingly captured the market space. | ||
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=Wealth of Central Public Sector Enterprises (CPSEs)= | =Wealth of Central Public Sector Enterprises (CPSEs)= | ||
| − | + | According to Central Public-Sector Enterprise Survey 2016-17<ref>Department of Public Enterprises. "Public Enterprises Survey 2016-17". 2017 http://dpe.gov.in/sites/default/files/PE%20ENG%20Volume-1%20FINAL%20web.pdf </ref>, the net worth of the 331 CPSEs stood at ₹11,07,981 crore. 174 out 331 CPSEs are operating profitably. 82 are incurring losses. The 82 CPSEs reported losses of ₹30,759 in 2015-16 and ₹25,045 crore in 2016-17. The top 10 loss-making PSUs are: | |
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| − | According to Central Public-Sector Enterprise Survey 2016-17<ref>Department of Public Enterprises. "Public Enterprises Survey 2016-17". 2017 http://dpe.gov.in/sites/default/files/PE%20ENG%20Volume-1%20FINAL%20web.pdf </ref>, the net worth of the 331 CPSEs stood at ₹11,07,981 crore. 174 out 331 CPSEs operating profitably. 82 are incurring losses. The 82 CPSEs reported losses of ₹30,759 in 2015-16 and ₹25,045 crore in 2016-17. The top 10 loss-making PSUs are: | ||
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| − | + | Taking stock of the wealth occupied by PSUs is important considering that around 25 per cent of them are either running losses or are defunct. Only 174 CPSEs are making profits. To enable optimal use of these resources, privatisation has been considered as a strategy by the government, which is not a very recent topic policy circles. <ref>The Economic Times. "Divestment: Some profitable PSUs too may be put on the block". December 25, 2017. Accessed April 17, 2018: | |
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| − | Taking stock of the wealth occupied by PSUs is important considering that around 25 per cent of them are either running losses or are defunct. | ||
https://economictimes.indiatimes.com/news/economy/policy/divestment-some-profitable-psus-too-may-be-put-on-the-block/articleshow/62242001.cms</ref> | https://economictimes.indiatimes.com/news/economy/policy/divestment-some-profitable-psus-too-may-be-put-on-the-block/articleshow/62242001.cms</ref> | ||
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| + | There is no concrete data on the land occupied by CPSEs. One estimate suggests that total surplus land, lying idle with CPSEs adds up to 10 lakh acres<ref>Nayar, Lola. "This Land Is Your Land." Outlook India. September 14, 2016. Accessed March 23, 2018. https://www.outlookindia.com/magazine/story/this-land-is-your-land/297846.</ref> Government officials point out that most PSUs would have an average of 200-400 acres of land, while some may have over 1,200 acres. This is a travesty of invaluable resources, especially in a country where the development of new educational institutions, health centres and infrastructure projects including roads faces roadblocks from a shortage of land. In monetary terms, the estimate of total surplus land with CPSEs will amount to Rs. 2.5 lakh crore. Other surveys show that just 58 CPSEs, including the defunct HMT Chinar Watches Ltd, HMT Watches Ltd, HMT Bearings Ltd, Tungabhadra Steel Products Ltd (TSPL), and ailing units like National Textile Corporation (NTC), Braithwaith and Company, Bharat Wagons and Engineering, Bengal Chemicals and Pharmaceuticals Limited, Heavy Engineering Corporation and Hindustan Antibiotics Ltd, hold as much as 2.38 lakh acres of land. | ||
In addition, most CPSEs have assets in prime locations which more often than not are found in the middle of industrial or educational centres. So, the value they hold can easily be among the most expensive parcels in the country. Take the example of Air India’s prime building at Nariman Point in Mumbai for instance. | In addition, most CPSEs have assets in prime locations which more often than not are found in the middle of industrial or educational centres. So, the value they hold can easily be among the most expensive parcels in the country. Take the example of Air India’s prime building at Nariman Point in Mumbai for instance. | ||
| − | In addition to land, CPSEs hold other forms of fixed capital assets. | + | |
| + | In addition to land, CPSEs hold other forms of fixed capital assets. The table below provides the value of fixed assets held by 9 major CPSEs in the country. | ||
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| − | The fixed assets of | + | The fixed assets of these major CPSEs equal 11,73,577 crore. This is just a minor share of total wealth the PSUs have been sitting on. One estimate puts the valuation of their total assets at $500 bn. This is equivalent to ₹33 lakh crore.<ref>The Economist. "Most of India's state-owned firms are ripe for sale or closure." June 1, 2017. Accessed April 17, 2018 https://www.economist.com/news/business/21722860-privatisation-and-politics-sit-poorly-together-most-indias-state-owned-firms-are-ripe</ref>The figure is one-third of the valuation reported by Department of Public Enterprises, Ministry of Heavy industries and Public Enterprises. The rest is accounted for by State Enterprises. |
=Case Studies= | =Case Studies= | ||
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==Air India Limited== | ==Air India Limited== | ||
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In the Union Budget 2017-18, Arun Jaitley announced government’s plan to monetise land bank held by Airport Authority of India which is the third largest landowner in the country after armed forces and railways. <ref> Mishra, Mihir. "AAI to be allowed to monetise its 50,000 acres land bank". The Economic Times, February 1, 2017. https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/aai-to-be-allowed-to-monetise-its-50000-acres-land-bank/articleshow/56911527.cms</ref> | In the Union Budget 2017-18, Arun Jaitley announced government’s plan to monetise land bank held by Airport Authority of India which is the third largest landowner in the country after armed forces and railways. <ref> Mishra, Mihir. "AAI to be allowed to monetise its 50,000 acres land bank". The Economic Times, February 1, 2017. https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/aai-to-be-allowed-to-monetise-its-50000-acres-land-bank/articleshow/56911527.cms</ref> | ||
As per a document from the Geological Survey of India, several residential and commercial plots owned by Air India have been put up for Auction. These plots are mostly located in prime locations, with high values, with a consolidated area of about 92 acres. To generate revenue, Air India has finally started monetising its surplus land. <ref> Ministry of Mines."Information regarding e-auction of Air India residential cum commerciall plots and residential accommodations", Ministry of Mines, Government of India, April 11, 2017. https://employee.gsi.gov.in/cs/groups/public/documents/document/b3zp/mtm1/~edisp/dcport1gsigovi135398.pdf;jsessionid=hAFfB33R9uFI-d-ezjzms4fxodXWYAYJO6zsUgqAiBux3OdoegE0!1981203441!94318366</ref> | As per a document from the Geological Survey of India, several residential and commercial plots owned by Air India have been put up for Auction. These plots are mostly located in prime locations, with high values, with a consolidated area of about 92 acres. To generate revenue, Air India has finally started monetising its surplus land. <ref> Ministry of Mines."Information regarding e-auction of Air India residential cum commerciall plots and residential accommodations", Ministry of Mines, Government of India, April 11, 2017. https://employee.gsi.gov.in/cs/groups/public/documents/document/b3zp/mtm1/~edisp/dcport1gsigovi135398.pdf;jsessionid=hAFfB33R9uFI-d-ezjzms4fxodXWYAYJO6zsUgqAiBux3OdoegE0!1981203441!94318366</ref> | ||
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=References= | =References= | ||
Latest revision as of 13:24, 20 April 2018
Central Public-Sector Enterprises (CPSEs) include firms that are registered under Companies Act, 2013 and in which the Central Government holds more than 50% of the equity. Banking institutions and insurance companies are excluded from the definition of CPSEs. Railways, Defence and Ports are undoubtedly the largest public-sector entities and occupy vast parcels of land, but they have not been included in this section. As on 31st March 2017, there were 331 CPSEs. The CPSEs have their presence in a variety of sectors which includes and is not limited to Petroleum, Power, Steel, Mining and Transportation. CPSEs have monopolistic or a dominant position in these sectors. They also operate in competitive markets such as automobiles, textiles, telecommunications, information technology, etc. where private players have made significant inroads and have increasingly captured the market space.
Contents
Wealth of Central Public Sector Enterprises (CPSEs)
According to Central Public-Sector Enterprise Survey 2016-17[1], the net worth of the 331 CPSEs stood at ₹11,07,981 crore. 174 out 331 CPSEs are operating profitably. 82 are incurring losses. The 82 CPSEs reported losses of ₹30,759 in 2015-16 and ₹25,045 crore in 2016-17. The top 10 loss-making PSUs are:
| Sl No. | CPSE Name | Net Loss (in ₹crore) |
|---|---|---|
| 1 | Bharat Sanchar Nigam Limited | 4793 |
| 2 | Air India Limited | 3952 |
| 3 | Mahanagar Telephone Nigam Limited (MTNL) | 2941 |
| 4 | Hindustan Photo Films Manufacturing Co. Ltd. | 2917 |
| 5 | Steel Authority of India Ltd. | 2833 |
| 6 | Rashtriya Ispat Nigam Ltd. | 1263 |
| 7 | Western Coalfields Ltd. | 777 |
| 8 | STCL Ltd. | 563 |
| 9 | Brahmaputra Crackers & Polymer Ltd. | 547 |
| 10 | Air India Engineering Services Ltd. | 407 |
| Total | 20,994 | |
| Net Losses of all PSUs | 25,045 |
Taking stock of the wealth occupied by PSUs is important considering that around 25 per cent of them are either running losses or are defunct. Only 174 CPSEs are making profits. To enable optimal use of these resources, privatisation has been considered as a strategy by the government, which is not a very recent topic policy circles. [2]
There is no concrete data on the land occupied by CPSEs. One estimate suggests that total surplus land, lying idle with CPSEs adds up to 10 lakh acres[3] Government officials point out that most PSUs would have an average of 200-400 acres of land, while some may have over 1,200 acres. This is a travesty of invaluable resources, especially in a country where the development of new educational institutions, health centres and infrastructure projects including roads faces roadblocks from a shortage of land. In monetary terms, the estimate of total surplus land with CPSEs will amount to Rs. 2.5 lakh crore. Other surveys show that just 58 CPSEs, including the defunct HMT Chinar Watches Ltd, HMT Watches Ltd, HMT Bearings Ltd, Tungabhadra Steel Products Ltd (TSPL), and ailing units like National Textile Corporation (NTC), Braithwaith and Company, Bharat Wagons and Engineering, Bengal Chemicals and Pharmaceuticals Limited, Heavy Engineering Corporation and Hindustan Antibiotics Ltd, hold as much as 2.38 lakh acres of land.
In addition, most CPSEs have assets in prime locations which more often than not are found in the middle of industrial or educational centres. So, the value they hold can easily be among the most expensive parcels in the country. Take the example of Air India’s prime building at Nariman Point in Mumbai for instance.
In addition to land, CPSEs hold other forms of fixed capital assets. The table below provides the value of fixed assets held by 9 major CPSEs in the country.
| Sl No. | Name of CPSE | Gross Fixed Assets as on 31.03.2016 (in ₹crore) |
|---|---|---|
| 1 | Oil & Natural Gas Corporation Ltd. | 256,598 |
| 2 | Indian Oil Corporation Ltd. | 171,581 |
| 3 | NTPC Ltd. | 213,273 |
| 4 | ONGC Videsh Ltd. | 124,218 |
| 5 | Power Grid Corporation of India Ltd. | 193,862 |
| 6 | Bharat Petroleum Corporation Ltd. | 59,149 |
| 7 | Hindustan Petroleum Corporation Ltd. | 56,926 |
| 8 | GAIL (India) Ltd. | 46,780 |
| 9 | NHPC Ltd. | 51,900 |
| Total | 11,73,577 |
The fixed assets of these major CPSEs equal 11,73,577 crore. This is just a minor share of total wealth the PSUs have been sitting on. One estimate puts the valuation of their total assets at $500 bn. This is equivalent to ₹33 lakh crore.[4]The figure is one-third of the valuation reported by Department of Public Enterprises, Ministry of Heavy industries and Public Enterprises. The rest is accounted for by State Enterprises.
Case Studies
Bharat Sanchar Nigam Limited
The Bharat Sanchar Nigam Limited (BSNL), holds vast tracts of land across India. According to the report number 17 of 2014 of the Comptroller and Auditor General (CAG) of India, BSNL hold huge tracts of land from the Department of Telecommunications in the year 2000. The Company does not however have a laid down Land Management Policy (May 2013). Procurement of land is carried out by the authorized functionaries as per the delegation of Financial powers of the Company. PGM (BW) which heads the Civil Wing of the Company at Corporate Office is mandated to maintain the database of the land bank of the company. As per details of land holdings contained in the MIS (Management Information System) maintained by the Civil Wing, the total number of plots, area of the plots, freehold/leasehold, cost of acquisition i.e. book value, present value, lease period etc., Circle-wise and SSA-wise, in respect of 44 out of 451 circles of the company was available as on 26 September 2012. The Company inherited from the DoT 12194 plots 3 measuring 406.31 lakh square meters with book value of `3103.03 crore located at various places. After formation of BSNL, the company had acquired/ taken on lease 2788 plots measuring 34.5 lakh square meters with book value of `380.41 crore. Thus, the total book value of the land as per the MIS data of Civil Wing was `3483.44 crore. As on 31 March 2012, the Company had 1953 plots with freehold rights measuring 32.46 lakh square meters kept fully vacant across the country in 29 circles. 1719 plots measuring 27 lakh square meters in selected 15 Circles were kept fully vacant out of the total freehold plots of 1135215 measuring 307.82 lakh square meters. In 25 out of selected 67 SSAs under 15 Circles, Audit observed that 119 plots covering an area of 1.70 lakh square meters with a book value of `7.60 crore were lying vacant (March 2012). [5]
Air India Limited
In the Union Budget 2017-18, Arun Jaitley announced government’s plan to monetise land bank held by Airport Authority of India which is the third largest landowner in the country after armed forces and railways. [6] As per a document from the Geological Survey of India, several residential and commercial plots owned by Air India have been put up for Auction. These plots are mostly located in prime locations, with high values, with a consolidated area of about 92 acres. To generate revenue, Air India has finally started monetising its surplus land. [7]
References
- ↑ Department of Public Enterprises. "Public Enterprises Survey 2016-17". 2017 http://dpe.gov.in/sites/default/files/PE%20ENG%20Volume-1%20FINAL%20web.pdf
- ↑ The Economic Times. "Divestment: Some profitable PSUs too may be put on the block". December 25, 2017. Accessed April 17, 2018: https://economictimes.indiatimes.com/news/economy/policy/divestment-some-profitable-psus-too-may-be-put-on-the-block/articleshow/62242001.cms
- ↑ Nayar, Lola. "This Land Is Your Land." Outlook India. September 14, 2016. Accessed March 23, 2018. https://www.outlookindia.com/magazine/story/this-land-is-your-land/297846.
- ↑ The Economist. "Most of India's state-owned firms are ripe for sale or closure." June 1, 2017. Accessed April 17, 2018 https://www.economist.com/news/business/21722860-privatisation-and-politics-sit-poorly-together-most-indias-state-owned-firms-are-ripe
- ↑ Report of the Comptroller and Auditor General of India.Report. 2014. Accessed April 4, 2018. http://www.saiindia.gov.in/sites/default/files/audit_report_files/Union_Compliance_Communication_IT_17_2014_Chapter_5.pdf.
- ↑ Mishra, Mihir. "AAI to be allowed to monetise its 50,000 acres land bank". The Economic Times, February 1, 2017. https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/aai-to-be-allowed-to-monetise-its-50000-acres-land-bank/articleshow/56911527.cms
- ↑ Ministry of Mines."Information regarding e-auction of Air India residential cum commerciall plots and residential accommodations", Ministry of Mines, Government of India, April 11, 2017. https://employee.gsi.gov.in/cs/groups/public/documents/document/b3zp/mtm1/~edisp/dcport1gsigovi135398.pdf;jsessionid=hAFfB33R9uFI-d-ezjzms4fxodXWYAYJO6zsUgqAiBux3OdoegE0!1981203441!94318366
