Central Public Sector Enterprises Current Affairs - 2020

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Public Enterprises Survey: Air India, MTNL, BSNL highest loss makings PSUs in FY19

On February 10, 2020, the Department of Public Enterprises operating under Ministry of Heavy Industries tabled the “Public Enterprises Survey” on the parliament. The report says that the net profit from the PSUs has increased by 15.5% as compared to the previous year.

Highlights

The survey said that Indian Oil Corporation, NTPC and ONGC were the top three profitable PSUs in 2018-19. On the other hand, MTNL, BSNL and Air India were the highest loss-making PSU. Also, the survey noted that these three PSUs have been making losses for three consecutive years.

The report also said that total income from Central Public Sector Enterprises (CPSE) in the year 2018-19 was 24 lakh crore rupees. It was 20 lakh crore rupees the previous year. There has been an increase of 4.67%

Relative performance

The enterprises such as MSTC, Chennai Petroleum Corporation and State Trading Corporation that were making profit last year (2017-18) incurred loss in the fiscal year 2019 (2019-19).

There are a total of 348 CPSEs. Out of these 249 are operational, 13 are under closure or liquidation and 86 are under construction.

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Departments to Conduct Review of Govt Guarantees

The Ministry of Finance has asked all the departments to undertake a review of government guarantees given by respective ministries to their Central Public Sector Enterprises (CPSEs) or entities.

Review of Government Guarantees

  • The review will look into aspects like whether the discharge of repayment obligations or interest obligations as per terms of the loan agreement and covenants and conditions met.
  • Further, the details of CPSEs or entities on due guarantee fee paid on time to the government should also be submitted.

Why there is a review of Government Guarantees?

  • Guarantees are contingent liabilities which have the potential to impact the financial performance of the government.
  • Further, the FRBM Rules stipulates that the government cannot guarantee more than 0.5 per cent of the GDP of the respective financial year to CPSE/entities.

Hence the Ministry of Finance has requested all ministries and departments to prioritised guarantee requirement for 2019-20 to include only such proposals where the loan agreement can be signed and guarantee agreement can be executed during the year.

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