Five things the PSUs may expect from Union Budget 2015-16

Finance minister Jaitley 

AS the finance minister Arun Jaitley is set to unveil his annual budget for 2015-16 to be presented on February 26, hopes are high among the PSUs. There are expectations and hopes from the finance minister in the backdrop of the...

NDA government giving a boost for indigenous production which may benefit many cash rich PSUs. Here are five things that the PSUs may expect from the budget.

Focus on smaller PSUs for divestment

Finance Minister Arun Jaitley is likely to announce a revamped strategy for disinvestment in public sector units. After two successful disinvestment bids in the form of SAIL and Coal India Limited, now focus may be shifted to stake sales in small units.

The Ministry is working on a list of nearly 12 PSUs including Dredging Corporation of India Ltd, NMDC Ltd, Nalco Ltd and MOIL Ltd.

The new strategy will be in place for disinvestment in the two months of this fiscal and more dominantly from 2015-16.

Package for sick PSUs

Will the Narendra Modi-led NDA government announce any revival package for the ailing PSUs? It is a big question for the entire gamut of the sick PSUs. Though the finance minister has time and again said that the sick PSUs will be shut for ever, the public enterprises minister has said that the potentially viable ill units may be revived. After the poll reversal in Delhi Assembly elections, the finance minister, who has said that the mandate is not likely to impact the pace of reform may nevertheless announce a bail out package for rehabilitation of the struggling units.

Selling of sick PSUs for revenues

There may be an announcement on a roadmap to sell off loss-making public sector undertakings, which are lying idle, to generate revenues for 2015-16. The list of PSUs to be privatised will be shortlisted soon, and a plan about which ones to be taken up in the first stage is being finalised.

Privatisation of sick PSUs

The government has already made it clear that it will shut some of the sick PSUs that are no longer sustainable. But the finance minister has also expressed readiness to look at privatisation of some loss-making public sector companies.

Asserting that the country needed to doggedly pursue the reforms agenda despite challenges, he maintained that reform is the art of possible but it cannot be just "one sensational idea".

There could be hundred things which could be done but the focus would be on what can be done immediately as part of the reform process, he said kicking off the two-day India Economic Summit here organised by Geneva-based World Economic Forum.

On privatisation and opening up more sectors such as insurance to foreign investors, Jaitley said the last time Bharatiya Janata Party-led NDA was in power, it followed a liberal model.

Bailing out sick PSUs

Recently, a committee headed by NTPC chairman Arup Roy Choudhury submitted a report advocating involvement of some profit-making central public sector undertakings (CPSEs) in aiding the revival of the sick ones.

However, that thin hope now seems to have fizzled out with the cash-rich PSUs showing unwillingness to spend money in reviving their sick brethren.

The report has already been submitted to the ministries of public enterprise and heavy industries.

Now, after the report was submitted, the revival package outlined by the Arup Roy Choudhury committee hangs in balance since the latter are not keen on extending any such lifeline.