Over Rs.61,600 crore in net worth of public sector firms eroded

New Delhi: Over Rs.61,600 crore in net worth has been eroded of 59 state- run companies during the last three years ending 2009-10, Minister of Heavy Industries and Public Enterprises Praful Patel said.

Hindustan Photo Films Manufacturing, under Patel’s ministry, reported the maximum amount of net worth erosion at Rs.6,828.4 crore, while Eastern Coalfields under the Ministry of Coal followed at Rs.6,015.54 crore, said the minister in a written reply in the Lok Sabha.

Indian Drugs and Pharmaceuticals under Ministry of Chemicals and Fertilizers was the third biggest loser among firms who had net liabilities at Rs.5,884 crore.

Net worth is the amount by which assets exceed liabilities.

The minister also said that only five central public sector enterprises (CPSEs) have been closed during 2007-08 to 2009-10. Indian Oil Technologies Ltd was closed in 2009-10, and Brushware Ltd had to shut down operations in 2008-09. Three CPSEs were closed in the previous fiscal.

Generally, the CPSEs are closed by the order of the Board for Industrial and Financial Reconstruction (BIFR). Cases of CPSEs are referred to BIFR when their accumulated losses are equal to or more than their net worth.

Based on the recommendations of a committee constituted to suggest ways of reviving state-run firms, the government has approved revival packages worth over Rs.24,300 crore for 42 CPSEs during the period under review which includes cash and non-cash assistance.

The non-cash assistance approval was to the tune of Rs.20,594.41 crore, while cash assistance amounted to Rs.3,712.16 crore.

Cash assistance usually involves budgetary support through equity or loan whereas non-cash assistance includes waiver of interest, penal interest guarantee fee or conversion of loan into equity. (IANS)