24 REVIEW OF LOSS MAKING CPSUs MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES (DEPARTMENT OF PUBLIC ENTERPRISES) COMMITTEE ON PUBLIC UNDERTAKINGS (2018-19) TWENTY FOURTH REPORT SIXTEENTH LOK SABHA LOK SABHA SECRETARIAT NEW DELHI 1 TWENTY FOURTH REPORT COMMITTEE ON PUBLIC UNDERTAKINGS (2018-19) (SIXTEENTH LOK SABHA) REVIEW OF LOSS MAKING CPSUs MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES (DEPARTMENT OF PUBLIC ENTERPRISES) Presented to Lok Sabha on 20.12.2018 Laid in Rajya Sabha on 20.12.2018 LOK SABHA SECRETARIAT NEW DELHI 20 December,2018/ 29 Agrahayana,1940(Saka ) 2 CONTENTS Page No. COMPOSITION OF THE COMMITTEE (2018-19) ................... (iii) COMPOSITION OF THE COMMITTEE (2017-18) ................. (v) COMPOSITION OF THE COMMITTEE (2016-17) ................ (vii) COMPOSITION OF THE COMMITTEE (2015-16) ................. (ix) INTRODUCTION ..................................................................... (x) ACRONYMS ............................................................................ (xi) REPORT PART I Page No. CHAPTER I INTRODUCTORY 1 CHAPTER II BACKGROUND 3 CHAPTER III STUDY OF LOSS MAKING CPSUs IN DIFFERENT SECTORS 9 (A) INDUSTRIAL SECTOR 9 (B) TELECOMMUNICATION SECTOR 19 (C) STEEL SECTOR 28 (D) FERTILIZER SECTOR 41 (E) PHARMACEUTICAL SECTOR 45 (F) PETROLEUM SECTOR 51 (G) CIVIL AVIATION SECTOR 55 (H) SOCIAL SECTOR 61 CHAPTER IV POLICY REGULATION AND GUIDELINES FOR CPSUs 67 CHAPTER V RETAINING OF STRATEGIC CPSUs 79 CHAPTER VI AUTONOMY FOR CPSUs 84 CHAPTER VII CONSOLIDATION/MERGER ISSUES 90 CHAPTER VIII DISINVESTMENT/STRATEGIC SALE OF CPSUs 93 CHAPTER IX PERFORMANCE MEASUREMENT PARAMETERS 98 CHAPTER X DIVERSIFICATION OF ACTIVITIES 100 CHAPTER XI MANPOWER ISSUES 102 CHAPTER XII LAND MANAGEMENT AGENCY 106 CHAPTER XIII DELAY IN DECISION MAKING 111 CHAPTER XIV CASE STUDIES 113 PART-II RECOMMENDATIONS / OBSERVATIONS OF THE 116 COMMITTEE 3 ANNEXURES I. Details of over all performance of CPSUs during the last ten years. 145 II. List of 82 CPSUs that made losses during 2016-17 146 III. List of 74 loss making CPSUs studied by the Inter Ministerial 148 Committee of NITI Aayog alongwith the recommendations. IV. The performances of loss making CPSUs under various Ministries/ 152 Departments in different sectors studied by the Committee on Public Undertakings. V. List of CPSUs to which Government has accorded 'in principle' 158 approval for strategic disinvestment. VI. List of 33 loss making CPSUs that have been approved for closure/ 159 revival / disinvestment as per DPE. (Out of 79 CPSUs) APPENDICES I. Minutes of the Sitting of the Committee on Public Undertakings held on 9 June, 2016 162 II. Minutes of the Sitting of the Committee on Public Undertakings held on 27 June, 2016 165 III. Minutes of the Sitting of the Committee on Public Undertakings held on 6 October, 2016 168 IV. Minutes of the Sitting of the Committee on Public Undertakings held on 26 September, 2017 171 V. Minutes of the Sitting of the Committee on Public Undertakings held on 11 October, 2017 176 VI. Minutes of the Sitting of the Committee on Public Undertakings held on 12 October, 2017 179 VII. Minutes of the Sitting of the Committee on Public Undertakings held on 14 November, 2017 181 VIII. Minutes of the Sitting of the Committee on Public Undertakings held on 15 November, 2017 185 IX. Minutes of the Sitting of the Committee on Public Undertakings held on 28 November, 2017 188 X. Minutes of the Sitting of the Committee on Public Undertakings held 190 on 29 November, 2017 XI. Minutes of the Sitting of the Committee on Public Undertakings held on 7 December, 2017 193 XII. Minutes of the Sitting of the Committee on Public Undertakings held on 8 December, 2017 196 XIII. Minutes of the Sitting of the Committee on Public Undertakings held on 24 January, 2018 198 4 XIV. Minutes of the Sitting of the Committee on Public Undertakings held on 21 February, 2018 203 XV. Minutes of the Sitting of the Committee on Public Undertakings held on 22 February, 2018 206 XVI. Minutes of the Sitting of the Committee on Public Undertakings held on 13 June, 2018 208 XVII. Minutes of the Sitting of the Committee on Public Undertakings held on 29 June, 2018 210 XVIII. Minutes of the Sitting of the Committee on Public Undertakings held on 20 August, 2018 211 XIX Minutes of the Sitting of the Committee on Public Undertakings held on 20 November, 2018 213 5 COMPOSITION OF COMMITTEE ON PUBLIC UNDERTAKINGS (2018-19) Shri Shanta Kumar - Chairperson Members Lok Sabha 2. Shri L.K. Advani 3. Shri Ramesh Bais 4. Shri G. Hari 5. Dr. Khambhampati Haribabu 6. Shri Boianappalli Vinod Kumar 7. Shri Ajay Nishad 8. Shri Prahlad Singh Patel 9. Shri Nagendra Kumar Pradhan 10. Prof. Saugata Roy 11. Shri Narendra Keshav Sawaikar 12. Shri Ravneet Singh 13. Shri Sushil Kumar Singh 14. Shri Rameshwar Teli 15. Vacant Rajya Sabha 16. Shri Pratap Keshari Deb 17. Shri Naresh Gujral 18. Mohd. Ali Khan 19. Shri Shamsher Singh Manhas 20. Shri Ram Vichar Netam 21. Shri A.K. Selvaraj 22. Shri C.M. Ramesh SECRETARIAT 1. Smt. Sudesh Luthra Additional Secretary 2. Shri R. C. Tiwari Joint Secretary 3. Shri G.C. Prasad Deputy Secretary 6 COMPOSITION OF THE COMMITTEE ON PUBLIC UNDERTAKINGS (2017-2018) Shri Shanta Kumar - Chairperson Members Lok Sabha 2. Shri L.K. Advani 3. Shri Ramesh Bais 4. Shri G. Hari 5. Shri Rabindra Kumar Jena 6. Dr. Hari Babu Kambhampati 7. Shri Kristappa Nimmala 8. Shri Ajay Nishad 9. Shri B. Vinod Kumar 10. Shri Prahlad Singh Patel 11. Prof. Saugata Roy 12. Adv. Narendra Keshav Sawaikar 13. Shri Ravneet Singh 14. Shri Sushil Kumar Singh 15. Shri Rameswar Teli Rajya Sabha 16. Shri Narendra Budania 17. Shri Naresh Gujral 18. Shri Shamsher Singh Manhas 19. Shri Praful Patel 20. Shri A.K. Selvaraj 21. Shri Tapan Kumar Sen 22. Shri Ram Chandra Prasad Singh 7 COMPOSITION OF THE COMMITTEE ON PUBLIC UNDERTAKINGS (2016-2017) Shri Shanta Kumar - Chairperson Members Lok Sabha 2. Shri L.K. Advani 3. Shri Ramesh Bais 4. Shri Biren Sing Engti 5. Dr. Khambhampati Haribabu 6. Shri Kristappa Nimmala 7. Shri Prahlad Singh Patel 8. Shri Shivaji A. Patil 9. Shri Ajay Nishad 10. Shri Ram Sinh Rathwa 11. Shri Narendra Keshav Sawaikar 12. Shri B. Senguttuvan 13. Shri Sushil Kumar Singh 14. Shri Kalikesh Narayan Singh Deo 15. Shri Rameshwar Teli Rajya Sabha 16. Shri Narendra Budania 17. Shri Ram Narain Dudi 18. Shri Naresh Gujral 19. Shri Praful Patel 20. Shri A.K. Selvaraj 21. Shri Tapan Kumar Sen 22. Shri Ram Chandra Prasad Singh 8 COMPOSITION OF THE COMMITTEE ON PUBLIC UNDERTAKINGS (2015-2016) Shri Shanta Kumar - Chairperson Members Lok Sabha 2. Shri L.K. Advani 3. Shri Ramesh Bais 4. Shri Pankaj Chaudhary 5. Shri Nand Kumar Singh Chauhan 6. Shri Biren Singh Engti 7. Shri Feroze Varun Gandhi 8. Dr. Khambhampati Haribabu 9. Shri Baijayant Panda 10. Shri Prahlad Patel 11. Shri Rayapati Sambasiva Rao 12. Shri Ram Sinh Rathwa 13. Prof. Saugata Roy 14. Shri B. Senguttuvan 15. Shri Sushil Kumar Singh Rajya Sabha 16. Shri Narendra Budania 17. Shri Muthukaruppan 18. Shri Praful Patel 19. Shri Rangasayee Ramakrishna 20. Shri C.M. Ramesh 21. Shri Tapan Kumar Sen 22. Shri Ramchandra Prasad Singh 9 INTRODUCTION I, the Chairperson, Committee on Public Undertakings (2018-19), having been authorized by the Committee to submit the Report on their behalf, present this Twenty- fourth Report on 'Review of Loss Making CPSUs'. 2. The predecessor Committee on Public Undertakings (2015-16) had taken up this subject for detailed examination and report. The subject was subsequently carried forward by the successor Committees in 2016-17, 2017-18 and 2018-19. The Committee on Public Undertakings took oral evidence of Department of Public Enterprises, Department of Heavy Industries, Department of Telecommunications, Department of Fertilizers, Department of Pharmaceuticals, Confederation of Indian Industry, National Institute of Public Finance and Policy, NITI Aayog and 12 CPSUs viz. Bharat Sanchar Nigam Limited (BSNL), Air India Limited, Fertilizers and Chemicals (Travancore) Limited (FACT), Hindustan Antibiotics Limited (HAL), Mahanagar Telephone Nigam Limited (MTNL), Bharat Petro Resources Limited (BPRL), Instrumentation Limited (IL), Hindustan Paper Corporation Limited (HPC), Hindustan Steelworks Construction Limited (HSCL), Security Printing and Minting Corporation of India Limited (SPMCIL), Steel Authority of India Limited (SAIL), Hindustan Machine Tools Limited (HMT Limited). The Committee also obtained written replies from NBCC India Limited. 3. The Committee considered and adopted the draft Report at their sitting held on 20 November, 2018. 4. The Committee wish to express their thanks to the representatives of the aforesaid Departments / Organizations / Institutions and these 12 CPSUs for tendering their evidence before the Committee and furnishing the requisite information in connection with the examination of the subject. 5. The Committee also wish to express their sincere thanks to the predecessor Committees for their endeavours in examination of the subject. 6. For facility of reference and convenience, the Observations / Recommendations of the Committee have been printed in bold letters in Part - II of the Report. New Delhi SHANTA KUMAR 14 December, 2018 Chairperson, 23 Agrahayana, 1940 (S) Committee on Public Undertakings. 10 ACRONYMS BBJ Braithwaite Burn and Jessop Construction Limited BCCL Bharat Coking Coal Limited BHEL Bharat Heavy Electricals Limited BPCL Bharat Petroleum Corporation Limited BPRL Bharat Petro Resources Limited BRL Bharat Refractories Limited BSL Bokaro Steel Limited BSNL Bharat Sanchar