I myself visited the HMT, about which a reference was made here. I went to Bangalore and tried to see the HMT factory. Pandit Jawaharlal Nehru had said: `HMT is the jewel of our country'. I must say that it is really the jewel of our country. But HMT is also suffering from losses. The loss is about Rs. 300 crore. If someone goes and sees the Head Office of the HMT or other units, we certainly say that we are proud of the company like HMT even today. I am talking about the watch manufacturing unit of HMT. The world is going so fast with new technology; the way in which they manufacture watches and the speed with which we manufacture watches, it makes a difference. None should feel that we are incompetent or our workers are incompetent to manufacture the best possible watches in our country. Even in our country, there is another company, I do not like to take the name here, which is also manufacturing very good watches. So, it is true that the technology, which is at present in the PSUs, has to be replaced. But, as rightly said, if they were not in a position to give wages or salary to the workers in some cases, how can we infuse more money for bringing new technology in these companies. Sir, the only way out was disinvestment, which was adopted to find out a new technology, to bring in the new technology and with the help of the new technology we will be able to compete in the world market.
The other reasons are lack of economy of scale in manufacture; prolonged insulation from competition; availability of cheaper and better products from imports; and lack of orders.
Since when the public enterprises were started, it is true that in some cases, there was the guarantee of orders. For instance, the railway wagons. There were public enterprises which were manufacturing only wagons. But now, the wagon-manufacturing will always depend on the requirement of Railway Department and if their demand comes down, then they will not ask for wagons, the wagons will not be manufactured and the particular Public Enterprises Department comes into a great difficulty. I have given only one illustration but a number of illustrations of this nature can be given.
Regarding low productivity and surplus manpower, Sir, it is true that I would urge upon the entire House to understand that the very designs of the public enterprises and the private enterprises are different. The public enterprises have a social angle behind the work. Public enterprises do not work only for profit purposes. They also want to consider the aspect of employment in the country. When it was a monopoly business, they could do it and they could prosper. The decision on the excess manpower was also taken, maybe, at the request of the representatives of the people from different parts of the country. Maybe, it is because the people at that time thought that the company may prosper in future and, therefore, the excess manpower was inevitable, because that decision was taken from the angle of social aspect also.
Now, to go ahead with this particular manpower has become a difficult task and, there, the role of the Unions is also important. I have always been saying that if we, all of us, really desire to improve upon this public enterprises' business, it is not impossible to do that. But, then the cooperation from all sections will be necessary including the Unions and their leaders. The surplus manpower has also created a lot of problems.
Even in case of disinvestment, the people always ask, how many people are working. In some cases, they say this work does not require even the one-third force of what is employed today. When the question comes up for reducing the people over there, it becomes really a difficult problem, and, therefore, the disinvestment work is also not going ahead with the speed with which we really wanted it to go ahead.
I would not like to go into the social overheads and commitments but there are social overheads and commitments in these companies. When some of my friends were talking of corruption in public enterprises, they have just forgotten that corruption is not only in public enterprises but it has also gone into all the spheres of life. I am not defending corruption in public enterprises. If anybody gives the concrete example, I will see to it that to that extent it is stopped. But at the same time, it is everywhere. Therefore, it has become really a very difficult task.
Regarding gross neglect by erstwhile private-owners of those Units which the Government was compelled to take over in public interest, Sir, if you go into the details, you will find that at least 30 per cent to 40 per cent of the public enterprises were taken under coercion. That coercion was in public interest. Somebody did not want to keep them. Therefore, we have taken them. We did not go into the details whether in future we will run this in profit or whether this will create problems for us. Whether it is necessary to take such type of decision, I must say that no private persons would have taken these type of industries which are risky to take, which are from the point of view of business, are not advisable to take, but they were taken. The Government decision, at that time, was not bad. Therefore, it is also not good now to criticize the Government because we have taken that responsibility at that time. At that time, we all appreciated.
Now, only the people who are in the textile units -- Shri Mohan Rawale will understand -- came and asked us that the NTC must be taken over and all the sick mills should be taken over.
If you ask the Government to take such measures in the interest of protection of workers and thereafter if we are unable to run the mills, how can the Government be held responsible for such activities? It is beyond the control of the Government to run such type of mills and so is the case with the enterprises also...(Interruptions)
I am just talking about the general points; individual cases I shall take up later on.
Sir, these were some of the reasons why the companies are becoming sick. I am also in agreement that sometimes the managements are not good. As the Members have already said, sometimes there is political interference or sometimes there is a dual machinery which is working. So, that also creates problems. But by saying that and by blaming the CMDs of the public enterprises, we may sometimes be doing a great injustice to them also. I see some of them really working hard. They are trying sometimes to bring the company out of difficulty...(Interruptions)
SHRI RAMESH CHENNITHALA (MAVELIKARA): Sir, there is an inordinate delay in the appointment of Chairmen and Managing Directors of the existing PSUs because of the formalities. Will the Government contemplate to simplify the formalities so that the Chairmen and the Managing Directors can be appointed easily, without much delay?
SHRI MANOHAR JOSHI: I have noted your point and I agree to that also. It is absolutely true that the delay takes place because there is a lot of procedure. And when someone wants to be transferred, there is a lot of more procedure. It is not a defect in public enterprises, it is a defect of democracy that when you want the things to be clear to everyone - to the Parliament, to the public and to the Press also - then naturally the matters are a little difficult. That is the only reason. But still we shall try to shorten it.
DR. NITISH SENGUPTA (CONTAI): Sir, is it necessary that all cases of appointments, transfers, etc. should go to the Prime Minister for approval? Why can the Minister himself not approve?
SHRI MANOHAR JOSHI: I understand that and in some cases the Ministers are allowed also.
I do not remember the right figure, but a number of workers have shown willingness that they are prepared to accept VRS. Fortunately, in HMT, the Union and other people are very cooperative and, therefore, I am confident that the matter will be settled as soon as possible.
Sir, the question is not only about the officers, but there should always be a level playing field also. Some hon. Member also mentioned about it here. I have not been a student of economics but I do understand that. It seems that there is no level playing field. This complaint was made to me by the Private Sector Heavy Industries Association also in the CII meeting. A number of closures are taking place in private sector also only because of the fear of the zero duty formula which has been taken into consideration.
On the one side, we are charging the minimum duty or zero duty on the imported goods and therefore, they become cheaper, on the other side, there are a number of taxes being charged on the products which are being manufactured in our own country and therefore, the final products become so much expensive that nobody would be desirous of buying them. This has also created a problem and I assure the representatives of different unions, different companies that I will discuss this problem with the hon. Prime Minister and bring to his notice that if there is no level-playing field, it will be difficult for these industries to survive because I have noticed that there are complicated problems. But we have also to tackle this issue. These are some of the reasons I have noted and of course, I know that there may be some more reasons which I would like to go into.
Sir, is it not possible to improve upon this? Is it not possible to find the ways and means to see that we overcome the fear in our minds by finding out measures so that sick industries need not be closed? The basic objective of the Government as regards revival has been made clear.
Somebody raised the issue about BIFR. I collected the information that BIFR working is also taking a long time. Sir, this also needs application of mind. When I was in the other House, there also, it was raised by one of the hon. Members that the Government is not furnishing the information required by BIFR to it. I would only like to say that this requires more attention. As regards number of members, I would say that it was set up in 1987 and there are six members and one Chairman who are at present with the BIFR.
The Sick Industrial Companies Act, SICA makes it obligatory to refer units which have lost their net worth to BIFR. The BIFR is an arrangement to revive sick units where it is possible. It appoints an operating agency, it formulates rehabilitation package in consultation with financial institutions, the Government, the management, the employees and other agencies. This is a quasi-judicial body. If this work is given to some other authority, I am afraid that there may arise doubts or suspicions in the minds of people about whether those bodies may work properly. What is necessary is to put up a time-limit for the Government, for the financial institutions and also, to a certain extent, for the BIFR to settle the problems within certain prescribed time. If that can be done, it will be fine. The rehabilitation package includes writing off of past losses, conversion of past loans into equity, infusion of fresh equity, relief from past liabilities and provision of guarantees for fresh borrowings. Reconstruction of enterprises is also, thus, attempted. Therefore, I personally feel that this should not be done away with and it should be continued with.
I would like to tell only two figures to the House instead of taking more time of the House. In 1991-92, the profit-making Public Sector Enterprises earned a profit of Rs. 6,079 crore. Now, this has increased by 233 per cent to Rs. 20,267 crore in 1997-98. That means the percentage of profit has increased to a very large extent in these Public Sector enterprises also.
Sir, this shows that the PSUs have also been successful to a large extent.
Lastly, I would speak about disinvestment. It has become a must because these units were expected to be independent, but they have not become independent. If disinvestment is not done, then no money will come. When the debate was going on, a suggestion was made that a part of the amount which we get from the disinvestment should be given to those companies which are running heavy losses. That was my suggestion also, and I said this in one of my speeches. Ten per cent of the amount has been earmarked as a fund, and the money can be given from that. We have to push this matter further, and despite all the difficulties, we have to go ahead with the procedure of disinvestment.
Sir, I would not be able to reply to all the questions which the Members have raised. While making her point, Shrimati Geeta Mukherjee had raised a question about the GAIL shares, and according to her, those shares were sold at a cheaper price. I think, the reply to that question was given by the hon. Finance Minister in the House earlier that the price of the share depends upon the time when the shares are sold. There was a controversy in the newspapers on this, and a detailed reply was given to it. So, I do not want to take the time of the House by going into it again. She also said that the BIFR has been a failure. I have already replied to that. She said that some hard decisions are yet to be taken in regard to the workers' problems, and I am in agreement with her. Some other hon. Member also has given the same suggestion.
He said, in regard to PSUs,
Hon. Rawatji has raised the same issue.
I am seriously thinking that on these PSU matters,
a white paper will have to be issued. That white paper will be really a guideline for the Government to work, and for the PSUs, to improve upon. I am considering whether such a white paper should be issued, and this white paper will be exhaustive in nature. At the time of issuing such a paper, this type of discussion will be very much useful.
The Members have raised a number of questions and I have noted all their questions. But since you have indicated to me that my time limit is over, I may not be able to go into the details of all the questions. There was a suggestion that there should be a monitoring body, and it is a very good suggestion. I am inclined to accept this suggestion of having a monitoring body in respect of PSUs, and also a review has to be done from time to time in regard to its progress.
Sir, for want of time, I am not in a position to reply to all the queries which were raised. But I can assure the hon. Members that all the important questions which were raised would be replied in writing.
Before I complete my speech, I will reply to the last question which Shri Rawale has asked me in the House. I would only tell the hon. Member, Shri Mohan Rawale, that the question of textile mills not only relates to Maharashtra, but it has become a serious question all over India. Therefore, what has become necessary is diversification from time to time, as it is done in other business enterprises. We cannot always say that we will go ahead with the same business, though the same business has no demand.
You cannot go on with the same machinery; you cannot go on with the same business.
Some hon. Member here raised a point about the rate of interest. In foreign countries, the rate of interest is only two per cent to three per cent. But in our country, the industrialists are expected to go ahead with their business with interest rates, as high as twenty per cent. It really becomes difficult for them to go ahead with their business with such high interest rates.
Sir, the intention of the Government -- I must say, and Smt. Mukherjee would understand -- is quite clear. We are serious about the issue. We want to rehabilitate the workers very nicely. We have started not only the VRS but also the VSS. Otherwise, the workers would not have got the money which they are now getting. Therefore, the Government is interested in running the industry; we are interested in good rehabilitation of the workers and we are also interested in cooperation from all sections of this House. We are also considering the issuance of a White Paper on this subject.
Sir, therefore, I would like to request Smt. Geeta Mukherjee to withdraw the Resolution that she has moved. With these words, I conclude my speech.
SHRIMATI GEETA MUKHERJEE (PANSKURA): Mr. Chairman, Sir, the hon. Minister in his reply has stated that the number of PSUs that have been closed, as was mentioned by me, is not twelve. I would like to tell the hon. Minister that this figure was quoted by me from an official reply to a question asked by some hon. Member of this House. If the official answers are like this, then it is up to the Government.