CPSEs Current Affairs - 2019
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The Union Cabinet has approved closure of Central Public Sector Enterprise (CPSE) Burn Standard Company Ltd (BSCL) under Ministry of Railways. This decision was taken in view of continuous poor physical and financial performance of company for more than decade despite financial assistance and other support from government and low probability of its revival in future.
The closure of company will save public funds, which are currently being used for loss making BSCL and can be used for other developmental work. Central Government will provide one-time grant of Rs. 417.10 crore towards severance package and for clearing current liabilities of BSCL. In addition, outstanding loan of Rs. 35 crore given to BSCL by Ministry of Railways will be written off. The severance package will benefit 508 employees of BSCL from Voluntary Retirement Scheme (VRS).
Burn Standard Company Ltd (BSCL)
BSCL was incorporated in 1976 following nationalization and amalgamation of Burn and Company and Indian Standard Wagon Company Limited in 1987 under Department of Heavy Industries (DHI). The company was engaged in manufacturing and repair of wagons and production of steel.
It was referred to Board of Industrial and Financial Reconstruction (BIFR) in 1994 and was declared sick in 1995. The company continues to be sick company since then. Its administrative control was transferred from DHI to Ministry of Railways in 2010 as approved by then Cabinet Committee on Economic Affairs (CCEA).
State-run oil marketing company Bharat Petroleum Corporation (BPCL) is all set to become a Maharatna company. Presently it is having Navratna status.
The decision to elevate BPCL to Maharatna status was taken by panel headed by Cabinet secretary and an announcement to this effect will be made soon.
BPCL will be eight Central Public Sector Enterprises (CPSE) to get coveted Maharatna status. The status will enable BPCL Board to get enhanced powers which will help in expansion of its operations, both in India and abroad.
The Government had introduced Navratna scheme, in 1997, to identify CPSEs that had comparative advantages and to support them in their drive to become global giants. The Boards of Navratna CPSEs have been delegated powers in following areas: Capital expenditure, Investment in joint ventures / subsidiaries, Mergers & acquisition and Human resources management, etc.
The “Maharatna” category for CPSEs was introduced in 2009 with objective to empower mega CPSEs to expand their operations and emerge as global giants or become Indian Multinational Companies (MNCs),
At present, there are seven Maharatna companies — Bharat Heavy Electricals (BHEL), Coal India (CIL), GAIL (India), Indian Oil Corporation, NTPC, Oil and Natural Gas Corporation (ONGC) and Steel Authority of India (SAIL). Maharatna and Navaratna state-owned units operate in strategic fields such as coal, petroleum, steel, heavy engineering, telecommunications, power supply and transportation services.
Criteria for Maharatna status
Under government rules, Central Public Sector Enterprises (CPSEs) must fulfill following criteria for grant of Maharatna status.
- Having Navratna status.
- Average annual turnover of more than Rs. 25,000 crore, during last 3 years.
- Average annual net worth of more than Rs. 15,000 crore, during last 3 years.
- Average annual net profit after tax of more than Rs. 5,000 crore, during last 3 years.
- Should have significant global presence and international operations.
- Listed on Indian stock exchange with minimum prescribed public shareholding limit under SEBI regulations.