Govt. planning to shutdown Air India, MTNL and HMT among other Public Sector Undertakings.

[Desmond]

Synopsis: Five public sector undertakings (PSUs) will be closed down by the government, which has included some of the best known state-run enterprises like Air India, MTNL and Hindustan Shipyard, in the list of 65 sick PSUs, Lok Sabha was informed on Tuesday.

Five public sector undertakings (PSUs) will be closed down by the government, which has included some of the best known state-run enterprises like Air India, MTNL and Hindustan Shipyard, in the list of 65 sick PSUs, Lok Sabha was informed on Tuesday.

The five state-run organisations to be closed down include three HMT units whose brand of watches and tractors once ruled the market, Heavy Industries Minister Anant Geete said during Question Hour, adding that their employees were being offered a "very good" VRS package.

However, he did not name the other PSUs which are slated to be closed down.

Air India and MTNL, once market leaders in aviation and mobile telephony sectors respectively, were declared sick as per the criteria for a PSU to be declared as such, after they incurred losses worth 50 percent or more of their average net worth during four preceding years.

The Minister said there were 65 units in the list of sick PSUs as of March 31 last year.

The reasons for their sickness vary from enterprise to enterprise and included obsolete plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital, he said.

Air India accumulated losses of Rs 5388 crore, Rs 5490 crore and Rs 7559 crore in years 2013-14, 2012-13 and 2011-12 respectively, according to the figures tabled in the House. MTNL showed profit of Rs 7820 crore in 13-14 but had incurred losses of Rs 5321 cr and Rs 4109 cr in the previous years.

Hindustan Shipyard Limited posted losses of Rs 859 crore, Rs 551 crore and Rs 462 crore in the three years.

Geete said the concerned administrative ministries "prepare proposals for revival or otherwise of sick companies on case to case basis and obtain approval of the government."

MTNL stock price :

On March 11, 2015, Mahanagar Telephone Nigam closed at Rs 21.05, down Rs 4.9, or 18.88 percent. The 52-week high of the share was Rs 39.10 and the 52-week low was Rs 14.01.

The company's trailing 12-month (TTM) EPS was at Rs 115.91 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 0.18. The latest book value of the company is Rs 80.01 per share. At current value, the price-to-book value of the company is 0.26.

Source: Govt to shut down Air India, MTNL, HMT & few sick units? - Moneycontrol.com

 

[SaiyanGoku]

How can MTNL have such huge profits despite having such huge losses in previous years? I don't get it. That difference is too much.

 

[amit.tiger12]

so what about mtnl internet service and telephone service? we can use it??

 

[Desmond]

so what about mtnl internet service and telephone service? we can use it??

Too soon to tell.

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How can MTNL have such huge profits despite having such huge losses in previous years? I don't get it. That difference is too much.

They could be cooking their books, who knows.

 

[Minion]

I wonder what modi gov. is thinking right now India is already suffering from huge unemployment now they shutting these Indian firms even their land bill is crap they are taking away people's land now what will people do ?Sit in home.

 

[GhorMaanas]

the info available is dubious. it reads The five state-run organizations to be closed down include three HMT units whose brand of watches and tractors once ruled the market, heavy industries minister Anant Geete said during Question Hour, adding that their employees were being offered a “very good” VRS package. However, he did not name the other PSUs which are slated to be closed down. but it doesn't specifically say that MTNL will be closed down. HMT was known to have ceased/ceasing operations since long, and there were talks of MTNL and BSNL closing down since atleast 2011. VRS was handed out to some employees during that time. one exchange at Mumbai was said to be deliberately gutted to fire in order to destroy some info (though i suppose it was hearsay). the minister of comm & IT had said after taking his position at the office to 'strengthen' govt. telecom enterprises, so would be early to say if really its been decided to write them off. will have to see Mr. Geete's speech in LS if video is available.

 

[REDHOTIRON2004]

I wonder what modi gov. is thinking right now India is already suffering from huge unemployment now they shutting these Indian firms even their land bill is crap they are taking away people's land now what will people do ?Sit in home.

I really dont think that shutting those huge loss making psu's would cause unemployment. That gap would soon be filled by competitors and new players which would need more workers. Also, that would mean less burden on tax payer for supporting those loss making companies.

Also, due to huge competition that would come because of shutting down these sick units. We consumers would be charged lesser for better services. Govt sector or PSU'S have the worst work culture compared to private sector. Public sector employees have no time of working. Takes no responsibility and works according to there own rules as nobody can throw them out for not working.

Also, land deal are important. Land is the primary need for any development work. Airports, hospitals, high tech cities, power plants etc. Nothing can be made if land is not available.

I know it's difficult for farmers. But, someone have to compromise for overall development. And the cost of dams, highways, hospitals etc-2 keeps on rising if land is not acquired at the right time.

It's time to decide whether you want to live in a third world country or in an developed country. Time is of the essence. We shouldn't waste any time now. India can shine truly if development work would be done in lesser time and more efficiently.

Some people would have to compromise for the larger good of all. That's what democracy is. I want to have 24*7 electricity, water supply, good roads, world class hospitals, airports, metro in every city. And I know nothing is possible without land.

 

[GhorMaanas]

OT: hehe. i can see the thread deviating to the land acquisition bill.
i was/am disappointed to note people buying into the propaganda of opposition parties regarding the bill (saw such a scene on quora); them parties beat the govt. in marketing i can say. anyway, for anyone interested in reading about it, here's the govt.'s perspective (and mind you, further amendments have been brought to the bill, including the one that now land wont be acquired for private purposes, before it was passed in the LS y'day....i am yet to read up on those):

Facts and fiction of Land Acquisition Ordinance, as narrated by BJP - IBNLive

the opposition is doing one epic emotional atyaachaar on this! and there's a saying - 'if the congress and the communists/left are not happy & very miffed by some step/measure of the govt., be assured that the move is on the right track!'

though however good a bill may seem on paper, its the actual application of regulations on ground that matter. would like the govt. to ensure that they are followed, and that the presiding officer(s) of a region/project where the land is being acquired don't indulge in corrupt practices.

P.S. - now the descendants of the original owners of the land where buildings like the parliament, hotels like Maurya sheraton, etc., are standing, they are demanding the land back or full compensation at the present rates, as they that their ancestors weren't paid the compensation. this is what i wrote about above.

 

[avinandan012]

These PSUs are incurring Crores of loss each year. Thus as a tax payer I am also incurring some % of that loss?
So I will agree they should close these PSUs which are filled by the babus who sits in office doing nothing and gets paid by the Govt. for that.

As for the land acquisition bill I work for a private sector company. If development happen in infrastructure by acquired land then more private companies will open thus increasing my chance of earning livelihood. So I will support this.

And there's crores of us(people like me) in India.

 

[Hrishi]

These PSUs are incurring Crores of loss each year. Thus as a tax payer I am also incurring some % of that loss?
So I will agree they should close these PSUs which are filled by the babus who sits in office doing nothing and gets paid by the Govt. for that.

As for the land acquisition bill I work for a private sector company. If development happen in infrastructure by acquired land then more private companies will open thus increasing my chance of earning livelihood. So I will support this.

And there's crores of us(people like me) in India.

I second that. Public sector babus must be taught a lesson.

 

[GhorMaanas]

However, Coal India workers had their say and way recently.

 

[icebags]

slowly slowly govt is losing properties and proceeding towards getting bankrupt.....

I second that. Public sector babus must be taught a lesson.

they can't be taught. they will get attractive packages big enough to pack their bags and set out to travel the world without thinking of money.

 

[Anorion]

ow HMT