Central Public Sector Undertakings : Policy Wise

Central Public Sector Undertakings : Policy Wise

Govt discusses handing maintenance of seized properties to NBCC


Mains Paper 3: Economy | Mobilization of resources

From UPSC perspective, the following things are important:

Prelims level: National Building Construction Corporation (NBCC), Prevention of Money Laundering Act (PMLA)

Mains level: Central government undertakings and their functioning

Properties confiscated under PMLA to be transferred

  1. The government is considering handing the task of maintaining, managing and earning revenue from immovable properties attached in money laundering cases to the National Building Construction Corporation (NBCC)
  2. These properties were seized, frozen or confiscated under the Prevention of Money Laundering Act (PMLA)


  1. The proposal to mandate NBCC to do the job was at the behest of the ED and mooted by the finance ministry about six months ago
  2. It was felt that lack of proper maintenance led to the decay of the properties and the agency had to continuously spend on their upkeep
  3. As of now, the ED manages the properties confiscated by it but does not have experience in how to do so

Provisions in PMLA

  1. There is no provision under PMLA for rental to earn revenue
  2. The government may consider amending necessary laws to ensure better upkeep of confiscated properties


National Building Construction Corporation (NBCC)

  1. It is a blue-chip Government of India Navratna Enterprise under the Ministry of Urban Development
  2. NBCC has a specialized subsidiary to handle tasks for managing the seized land the government and from central PSUs
  3. It is the sole land authorized agency for central undertakings
  4. The Company’s present areas of operations are categorized into three main segments

(i) Project Management Consultancy (PMC)

(ii) Real Estate Development

(iii) EPC Contracting

Central Public Sector Undertakings : Policy Wise

Action plan to put sick PSUs back on track- III

  1. Losses: The number of profit-making PSUs in the State had come down from 23 in 2011 to 10 in 2015-16
  2. Issues: Lack of professionalism, major drift from the goals for which they were incepted
  3. The government has started the stock-taking process and core issues that have slackened their functioning are being identified
  4. It has also been proposed to lay accent on the micro small and medium enterprises (MSME) sector, which is expected to generate a large number of job opportunities
Central Public Sector Undertakings : Policy Wise

Action plan to put sick PSUs back on track- II

  1. Thrust: It runs contrary to the popular perception that PSU revival can be achieved only through infusion of private capital
  2. Co-operative: Instead of opting for private capital, the government could well rely on the support of the cooperative sector, which is flush with funds
  3. NRIs:Govt can also rope in NRIs by offering firm surety and higher returns for their investment in the public sector
  4. Private capital is often accompanied by appendages and can be secured only as part of a technology acquisition package
  5. Since the government is determined on fortifying the public sector, resource mobilisation may not be a major hassle
Central Public Sector Undertakings : Policy Wise

Action plan to put sick PSUs back on track- I

  1. An action plan to put public sector undertakings back on track is soon to be rolled out
  2. The plan is being readied under the headship of M.P .Sukumaran Nair, chairman of the public sector Restructuring and Internal Audit Board (RIAB)
  3. It is a two-pronged action plan with short-term and long-term targets
  4. It envisages turning around PSUs within two years, and effecting minor course corrections in sick units within three months
  5. How? By sourcing funds from the cooperative sector, active involvement of Non-Resident Indians (NRIs) and also tapping other avenues
Central Public Sector Undertakings : Policy Wise

Proposal to hire private sector talent in PSUs wins approval

  1. The Cabinet gave an ex-post facto approval for amending public sector recruitment rules to allow the selection of candidates from the private sector and state public sector enterprises
  2. The nod is for the selection of candidates as non-internal candidates for a period of five years for appointment in Central Public Sector Enterprises (CPSEs)
  3. Aim: To bring in greater efficiency
Central Public Sector Undertakings : Policy Wise

Centre to set up 12 petrochemical complexes

The government was working on a policy to have at least one petrochemical complex in each refinery which could result in an investment of few lakh crore.

  1. At present, there are four Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) or petrochemical complexes in the country.
  2. A PCPIR is usually a delineated area for manufacturing various types of petrochemical compounds.
  3. PCPIR are currently present in Gujarat, Andhra Pradesh, Odisha and Tamil Nadu.
  4. As per the PCPIR policy, the Centre has to ensure the availability of external physical infrastructure linkages to these regions.
  5. Including rail, road connectivity to national highways, ports, and telecom connectivity.
Central Public Sector Undertakings : Policy Wise

Centre plans to shut two more sick PSUs

  1. The govt. plans to close down 2 more sick PSUs, a unit of HMT and Tyre Corporation of India Ltd.
  2. The Union Cabinet has already given in-principle approval for closing down few sick units.
  3. These units includes HMT Watches, HMT Chinar Watches, HMT Bearings, Hindustan Cables and Tungabhadra Steel Products.
  4. However, the govt  is also considering strategic sales of loss-making state-owned units.
  5. Through the strategic sale, the govt. aims to transfer management control of certain PSUs to the private sector.
Central Public Sector Undertakings : Policy Wise

Government considers Africa route to help central PSUs

Centre plans to help Central Public Sector Undertakings (CPSUs), including those incurring losses, set up subsidiaries or form joint ventures with State-owned enterprises (SOEs) in poor African countries.

  1. Department of Public Enterprises (DPE) wants MEA to influence African countries, especially those with hardly any private capital investment.
  2. The DPE, as per its proposal, wants these African countries to reserve several sectors for SOEs.
  3. The African countries will have to make policies conducive for the PSUs to operate.
  4. Private companies tend to not take the risk of investing in unstable economies such as those in Africa.
  5. So PSUs, with the help of African governments, can take lead in investments and the private sector can then follow.

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