Central Public-Sector Undertakings

Wealth of Central Public Sector Enterprises (CPSEs)

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.

According to Central Public-Sector Enterprise Survey 2016-17, 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:

Preliminary surveys show that just 58 CPSEs hold about 2.38 lakh acres of unused land. Officials point out that most PSUs would have an average of 200-400 acres of land, while some may have over 1,200 acres.

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. 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, this figure 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.

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. Just 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.

In addition, most CPSEs have assets in prime locations, like 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, which is easily among the most expensive areas in the country. In addition to land, CPSEs hold other forms of fixed capital assets. Table 1 provides the value of fixed assets held by top 9 CPSEs in the country.