191st Report of Committee on Industry Page 1 of 22 PARLIAMENT OF INDIA RAJYA SABHA DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY ONE HUNDRED AND NINETY FIRST REPORT ON DEMANDS FOR GRANTS (2006-2007), DEPARTMENT OF PUBLIC ENTERPRISES, THE MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES (PRESENTED TO THE RAJYA SABHA ON 22ND MAY, 2006) (LAID ON THE TABLE OF THE LOK SABHA ON 22ND MAY, 2006) RAJYA SABHA SECRETARIAT NEW DELHI MAY, 2006/VAISHAKHA, 1928 (SAKA) C O N T E N T S (I) COMPOSITION OF THE COMMITTEE (II) PREFACE (III) REPORT (IV) OBSERVATIONS/ RECOMMENDATIONS OF THE COMMITTEE– AT A GLANCE (V) MINUTES (VI) ANNEXURE PREFACE I, the Chairman of the Department Related Parliamentary Standing Committee on Industry, having been authorised by the Committee, hereby present this One Hundred Ninety First Report on the Demand for Grants (2006-2007) pertaining to the Department of Public Enterprises, Ministry of Heavy Industries and Public Enterprises. 2. The Committee heard the oral evidence of the Secretary and other representatives of the Department of Public Enterprises, Ministry of Heavy Industries and Public Enterprises, on the 12th April, 2006. 3. The Committee in its meeting held on 22nd May, 2006 considered and adopted the Report. New Delhi: SANTOSH BAGRODIA 22nd May, Chairman Department Related Parliamentary 2006; Standing Committee on Industry COMPOSITION OF THE COMMITTEE ON INDUSTRY (Date of constitution 5th August, 2005) Shri Santosh Bagrodia — Chairman RAJYA SABHA 2. Shri Surendra Lath 3. Shri Suresh Bhardwaj http://10.21.217.2/book2/reports/indus/191streport.htm 7/16/2008 191st Report of Committee on Industry Page 2 of 22 4. Dr. K. Malaisamy 5. Shri Pyarimohan Mohapatra 6. Dr. Vijay Mallya 7. Shrimati Sumitra Mahajan 8. Shri O.T. Lepcha* 9. Vacant 10. Vacant LOK SABHA 11. Shri Guharam Ajgalle 12. Shri Kailash Baitha 13. Shri Rajnarayan 14. Shri Swadesh Chakraborty 15. Shri Bapu Hari Chaure 16. Shri Subhash Sureshchandra Deshmukh 17. Shri Ram Singh Kaswan 18. Dr. Vallabhbhai Kathiria 19. Smt. Susmita Bauri 20. Shri Sunil Kumar Mahato 21. Shri Prakash Paranjpe 22. Shri Kishanbhai V. Patel 23. Shri Badiga Ramakrishna 24. Shri Gurjeet Singh Rana 25. Shri Sarvey Sathyanarayana 26. Smt. Rubab Sayeda 27. Kunwar Manvendra Singh 28. Shri Ganesh Singh 29. Shri Suraj Singh 30. Shri Girdhari Yadav 31. Shri Chandramani Tripathi SECRETARIAT Shri Sham Sher Singh, Joint Secretary Shri A.K. Singh, Deputy Secretary Shri K.P. Singh, Under Secretary Shri Girija Shankar Prasad, Committee Officer _____________________________________________________________ *Nominated to the Committee w.e.f. 8.5.2006 Report 1. The Department of Public Enterprises plays the nodal role in coordinating the matters of general policy of non-financial nature affecting all the public sector industrial and commercial undertakings. The mandate also includes the matters relating to MoU mechanism to improve the performance of PSUs. The Department is also the mandated with the issues pertaining to the Councelling, Retraining and Redeployment of the rationalized employees of the CPSEs. The DPE is also the administrative Department for the Board for Reconstruction of http://10.21.217.2/book2/reports/indus/191streport.htm 7/16/2008 191st Report of Committee on Industry Page 3 of 22 Public Sector Enterprises and the Bureau of Public Enterprises and looks after the issues relating to Permanent Machinery of Arbitration for PSUs. Usage of Information Technology 2. The Committee has been consistant in its view that as the nodal agency for all the CPSEs, the DPE should use its IT facility to collect and maintain the updated data of all the CPSEs in respect of its Guidelines on non- financial issues. 3. The Committee was informed that Department of Public Enterprises made use of IT facilities for collection of data for preparation of Public Enterprises Survey through e-mail. A special e-mail address [email protected] has been developed and communicated to CPSEs for sending data in an input data sheet evolved for this purpose and made available on the DPE website dpe.nic.in. Similarly to collect half yearly performance data from CPSEs a format has been put on website and CPSEs have been requested to send the information through e-mail. During 2004-05, a number of CPSEs had responded through e-mail alongwith general mode of communication. Further, the Public Enterprises Survey and the guidelines issued by DPE have been put on website. 4. The Committee reiterates its recommendation that the DPE should use its IT resources to collect the updated information on its Guidelines, various programmes and policies that are applicable to all the CPSEs. The DPE should also provide linkages from its Website to the Websites of other CPSEs. DPE’s Website should be enriched with the linkages with relevant Websites, Executive Development Programmes, Research Studies and Media Reports on the CPSEs, Parliamentary Questions and the Acts that are relevant to the CPSEs. The Committee recommends if possibility should be explored to create an IT Network among CPSEs with DPE as its hub. Demand No. 49 5. The DPE seeks an allocation of Rs. 35.32 crores for 2006-07. The Plan expenditure is Rs. 31.50 crores where as non-Plan expenditure is likely to be Rs.3.82 crores. The allocation for current year 2006-07 is higher by Rs. 1.58 crores as compared to RE 2005-06. The major Plan expenditure of Rs. 27.72 crores is on account of the CRR scheme for the VRS optees of the CPSEs. The Non-Plan expenditure for the Secretariat and Economic services is rs. 0.63 crores and the provision for projects/schemes for NE region and Sikkim is Rs. 3.15 crores which is 10% of the total plan outlay. BRPSE 6. The Committee observes that the Non-Plan allocations towards Secretariat Economic Services have been enhanced from Rs.2.56 crores in BE 2005-06 to Rs.3.45 crores BE 2006-07. During the Financial Year 2005-06, the DPE had to seek Supplementary Demands twice to meet the Domestic Travel Expenses (DTE) of the members of BRPSE, MOU Task Force, etc. It is also clear that BRPSE only considers the revival package prepared by the respective Administrative Departments. The BRPSE since inception has submitted its recommendations in respect of 29 cases till February 2006. Its recommendations are only persuasive for the competent authority i.e. the Cabinet or its Committee. The BRPSE does not have any separate Budget nor can it seek independent technical/professional advice. The Committee wanted to know whether in the absence of a separate Budget, the autonomy of the BRPSE could be seriously handicapped. 7. The Committee was apprised by the DPE that the BRPSE was a part-time advisory body and secretarial assistance is provided by Department of Public Enterprises. The relevant resolution dated 6.12.2004 constituting BRPSE enables the Board to take the advice of experts, if considered necessary. The Committee was further informed that all the expenditure of the Board was met through the budget of DPE. 8. The Committee feels that the BRPSE was set up as a specialized body mandated to look into the possibilities and ways of the revival of the PSEs. It is irrelevant if it is a part time or full time body, till such time it is delivering on its mandate. Though it was empowered to seek independent advice, yet in practice the BRPSE is relying on the inputs given by the concerned administrative Department. The Committee would like to know about the cases where the BRPSE has consulted an independent expert. The Committee wonders that devoid of http://10.21.217.2/book2/reports/indus/191streport.htm 7/16/2008 191st Report of Committee on Industry Page 4 of 22 independent advice, if BRPSE’s role is only to ratify the inputs given by concerned administrative Department. 9. The Committee took note of the DPE’s response on its query on the need for having a separate budget for BRPSE, that the matter was under examination and the views of the DPE would be furnished separately. 10. In view of Government’s emphasis on PSEs to generate internal resources to finance their revival, the Committee sought to know if the BRPSE formulated any Guideline on the unlocking of resources of the CPSEs by disposal of their surplus assets. 11. The Committee was informed that the DPE had advised the Administrative Ministries/Departments to submit the proposal in respect of the sick PSEs in the format prescribed by BRPSE. The format provided for furnishing details of the fund requirement and the means of financing including through sale of surplus assets, if any. BRPSE considers the proposals submitted by the Administrative Ministries/Departments including sale of surplus assets and utilisation of the proceeds for the revival of the PSE. The PSEs follow the transparent procedures for sale of assets and in the case of BIFR referred PSEs, the assets are sold as per the direction of BIFR. 12. The Committee has in a few cases observed that other stake holders like the State Governments, municipal authorities or ancillaries units too had claims on the surplus assets like land. In absence of a clearer policy, the process of negotiations among these stake holders could be protracted and prolonged, resulting in avoidable delay in disposal of surplus assets like land and its consequences for the concerned PSE. The Committee therefore impresses upon the DPE to take initiative to formulate a uniform policy on the issue and if required, consult the State Government and other stakeholders. NE Region 13. The Committee sought for the details of projects undertaken in NE from the allocated Rs.