Lok Sabha Question No. 1611 (UNSTARRED), answered on 2023-02-13
Subject: Performance of PSUs
Ministry: FINANCE
Asked by: S. Gnanathiraviam

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF PUBLIC ENTERPRISES

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## LOK SABHA UNSTARRED QUESTION NO. 1611 TO BE ANSWERED ON THE 13 th  FEBRUARY, 2023

## Performance of PSUs

No. 1611.  SHRI GNANATHIRAVIAM S.:

SHRI RAMDAS C. TADAS:

## Will the Minister of FINANCE be pleased to state:

- (a) whether the Government makes a regular assessment of performances of Central Public Sector Undertakings (CPSUs);
- (b) if so, the details thereof along with the parameters used to measure/rate the performance of the CPSUs;
- (c) the details of financial assistance being given to revive the CPSUs presently;
- (d)  the  number  of  loss  making  CPSUs  and  the  total  amount  of  losses  incurred  by  these CPSUs during the last three years and the reasons therefor; and
- (e) the number of CPSUs with negative net worth and their consolidated net worth and the steps taken/proposed to be taken by the Government to deal with such CPSUs?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR. BHAGWAT KISHANRAO KARAD)

(a)  &  (b)  Department  of  Public  Enterprises  (DPE)  evaluates  the  performance  of  Central Public Sector Enterprises (CPSEs) on annual basis as per the extant guidelines of DPE on Memorandum  of  Understanding  (MoU)  framework.  MoU  is  an  agreement  between  the management of the CPSEs and its Administrative  Ministry/  Department wherein  annual targets  are  fixed  for  certain  financial  and  non-financial  parameters.  Evaluation  of  the performance  of  the  CPSE  against  these  targets  is  done  at  the  end  of  the  financial  year. Financial  Parameters  include  'Revenue  from  Operations';  EBITDA  as  percentage  of revenue;  return  on  networth;  return  on  capital  employed;  asset  turnover  ratio;  capital expenditure; total return to shareholders. Non-financial parameters include physical outputs, procurement from GeM; procurement from MSEs.

(c) Government has notified in February, 2021 the New Public Sector Enterprise ('PSE') Policy  under  which  the  public  sector  commercial  enterprises  have  been  classified  as Strategic and Non-Strategic Sectors.  In Strategic Sectors, bare minimum presence of the existing public sector commercial enterprises at Holding Company level will be retained under  Government  control.  The  remaining  enterprises  in  a  strategic  sector,  will  be considered  for  privatisation  or  merger  or  subsidiarization  with  another  PSE  or  for closure. PSEs in Non-Strategic Sectors shall be considered for privatisation, where feasible, otherwise such enterprises shall be considered for closure.

(d) & (e) As per the information available in Public Enterprises Survey, the number of loss making CPSEs and the total loss incurred by the CPSEs for the period FY 2019-20 to FY 221-22 is given below:

| Financial Year   |   No. of loss making CPSEs | Amount of Loss (₹ in Crore)   |
|------------------|----------------------------|-------------------------------|
| 2019-20          |                         84 | 44,817                        |
| 2020-21          |                         77 | 31,058                        |
| 2021-22          |                         59 | 14,586                        |

There are 25 operating CPSEs with negative net worth having total consolidated net worth of  ₹  (-)36847.80  crore  as  on  31.03.2022.  The  CPSEs  function  under  the  administrative control of respective Ministries/Departments. The profitability of CPSEs depends on various factors  that  include  demand  and  supply  of  finished  goods  and  raw  materials,  prevailing market  conditions,  increase/decrease  in  revenue,  increase/decrease  in  expenses,  stock valuation, etc.

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