Press ConferencePress Conference by by

HON’BLE HON’BLE SHRI ANANT GEETESHRI ANANT GEETE,, MINISTERMINISTER

(Heavy Industries & Public (Heavy Industries & Public Enterprises)Enterprises)

Date: 25th September, 2014

Venue: PIB Conference Room, Shastri Bhawan

Progress of India and development of Heavy Industries is synonymous since they contribute significantly to GDP (~9%), tax revenues and employment opportunities (over 20 million).

Ministry is aligned with the vision of Hon’ble Prime Minister with regard to the “Make in India” Policy, i.e. promote indigenous production with global quality standards.

Substantial capital and technological investments needed.

Ministry is incessantly striving to achieve this goal.

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CAPITAL GOODS SECTORCAPITAL GOODS SECTOR

CG Sector annual turnover ~ `2 Lakh Cr. / Export ~ `50,000 Cr

GoI has sanctioned pilot scheme for enabling industries in Capital Goods Sector to be in line with global competition with a provision of `930.96 crores of which:

`581.22 crore would be provided by the GoI through grants-in-aid; and

The remaining would be contributed by consortium of industries.

Features of “`930.96 crore Capital Goods Sector Scheme”-

Five Centres of Excellence for technology development at IITs (Delhi, Mumbai, Chennai & Kharagpur ) and CMTI, Bengaluru (` 312.5 cr)

One Integrated Industrial Infrastructure Facilities park for Machine Tool, near Bengaluru (` 400 cr)

Two Common Engineering Facilities Centres (one of them at Surat Gujarat) (` 61.20 cr)

Testing and Certification Centre for Construction equipment and earthmoving machinery (` 100 cr)

Technology Acquisition Programme ( `50 cr) 4

CAPITAL GOOD SKLLS DEVELOPMENT CAPITAL GOOD SKLLS DEVELOPMENT COUNCILCOUNCIL

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• To meet the long term demand of skilled manpower alongside technological developments.

• Will make comprehensive plan comprising of skill gap identification, standardization of occupation standards, selecting master trainers, training of trainers and third party certification etc.

• DHI will also utilize manpower of its PSUs as also skilled youth residing in and around these PSUs purely on demand basis thereby ensuring their employment.

Projected to cover > 1 million over next 5 years.

CENTRAL PUBLIC SECTOR UNDERTAKINGS CENTRAL PUBLIC SECTOR UNDERTAKINGS UNDER DHIUNDER DHI

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• 32 PSUs are being administered by DHI

• Some of these PSUs are getting Govt. aid as Non-Plan loan for paying Salaries and other Statutory dues.

• Preparing roadmap for identifying PSUs, that are not capable of revival, for closing them down after giving benefit of Voluntary Separation Scheme(VSS).

Bharat Heavy Electrical Limited (BHEL)Bharat Heavy Electrical Limited (BHEL)

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• BHEL, a Maharatna CPSE, is a leader in India in developing frontier technologies in several areas including power, renewable energy, railway locomotives, defence etc.

• Recently, BHEL has launched totally flexible fuel boilers, first of its kind for super critical power plant.

• Flexible boilers can use 0-100% domestic and imported coal

Ultra Mega Green Solar ParkUltra Mega Green Solar Park

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• Proposal to establish Ultra Mega Green Solar Power Park with an ultimate capacity of 4000 MW in Rajasthan, with 1000 MW Solar Power Plant in first stage at an estimated cost of `7950 cr through a JV including BHEL, Sambhar Salts,

REIL etc.

HEAVY ELECTRICAL EQUIPMENT SECTORHEAVY ELECTRICAL EQUIPMENT SECTOR

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• Heavy Electrical Equipment Sector contributes to ~70% of total Capital Goods Sector• ¾ of India’s energy is produced through thermal power• Currently facing coal shortage domestically• R&D Project initiated for Advanced Ultra Super critical Technology through BHEL, NTPC and IGCAR

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• Total outlay of AUSC Project ~ `1500 cr / DHI budgetary support – Rs. 1100cr

• R&D phase to complete by mid 2017, followed by first 800 mw power plant by NTPC

• Approx 11% energy efficient and 18% CO2 reduction over Super Critical level• Will place India in top 3 or 4 technologically advanced nations.

AUTO SECTORAUTO SECTOR

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• An important Sector – contribution to National GDP (7.1%) total turnover (approx. US $ 80 Billion per year and employment (approx. 19 million)

• After slowdown in last 2 years, Sector now showing good sales growth of 12 % during April – August (2014) over previous year owing to continuation of lower excise duty rates:

Types of Vehicles Increase

Two-wheeler 15%Three-wheelers 17%Passenger Cars 4.5%

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• Ministry working to finalize Auto Mission Plan–II for 2016-2026, to be launched in mid 2015.

• Assistance being provided for more vibrant and strong auto sector through :

UNIDO-ACMA Auto Cluster Scheme (Covering 500 tier 2 and 3 units in next 3 years)

Auto Skill Development Council (ASDC) – over 100 job rolls developed for curriculum, TOT, assessment, certification etc. Over 1 Lakh trainees to be covered this year.

Electric Vehicle SchemeElectric Vehicle Scheme

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• Important Component are – Demand and Supply incentive, public charging Infrastructure, R&D and Pilot Projects.

• Envisages potential demand for 6-7 million hybrid/electric vehicles by 2020

• Anticipated fossil fuel saving of over `60,000 crore

• Anticipates considerable CO2 emission reduction

• Additional job creation of ` 2.5 – 3 lakhs

Status: Scheme with total outlay of Approx. ` 14,000 cr is awaiting approval of EFC / Cabinet.

DEPARTMENT OF

PUBLIC ENTERPRISES

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Mandate of DPEMandate of DPEDepartment set up as BPE in 1965 & became a

full fledged Department in 1990.

Acts as a nodal agency for all CPSEs and formulates policy pertaining to the role of PSEs in the economy.

Lays down policy guidelines on performance improvement & evaluation (MoU), autonomy & financial delegation and personnel management. (Management, Corporate Governance, CSR, Counselling, Retraining & Redeployment)

Collects, evaluates and maintains information on several areas in respect of PSEs. (Survey)

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CPSEs : A fact sheet (as CPSEs : A fact sheet (as on31.03.2013)on31.03.2013)

Out of 277 CPSEs, 229 are operating and 48 are under construction.

Total investment in CPSEs is `8,50,599 crore.229 operating CPSEs reported turnover of `

19,45,777 Crore.169 CPSEs earned profit while 79 CPSEs

reported losses.Profit of CPSEs increased by 17% from

`98,246(2011-12)crore to Rs 1,15,298 Crore(2012-13).

Loss of 79 loss making CPSEs marginally increased by 2% from ` 27,683 Cr to Rs. 28,260 Cr.

Total employees strength in CPSEs is `14.04 lakh. 16

Corporate Governance InitiativesCorporate Governance Initiatives

• Revamp of the process of selection and appointment of Independent Directors currently underway.

• Aligning DPE Guidelines such as those on Corporate Governance and Board of Directors with provisions of Companies Act, 2013.

• Capacity Building of Independent Directors of CPSEs.

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Memorandum of Understanding (MoU)Memorandum of Understanding (MoU)

A mutually negotiated agreement between the management of the CPSEs and the Government of India/ Holding CPSEs.

Dynamic Exercise and Balanced Score Card approach - Financial and Non Financial areas included.

Coverage of CPSEs steadily increasing.

Commitment & Assistance from Government included

Efforts to make MoUs more flexible and incorporate national/international benchmarks and encourage globalization.

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Corporate Social Responsibility (CSR) & Corporate Social Responsibility (CSR) & Sustainability Sustainability

DPE issued the first Guidelines on CSR in April 2010. Revised DPE guidelines on CSR & Sustainability were

effective from April 2013. DPE guidelines have ceased to exist after CSR Rules

notified by Ministry of Corporate Affairs (MCA) under Section 135 of Companies Act, 2013 came into effect on 1st April, 2014.

CSR Rules are applicable to all companies including CPSEs.

Several CPSEs have demanded that DPE should also issue guidelines on CSR & Sustainability within the overall mandate of the Companies Act, 2013. DPE drafted guidelines for CPSEs to supplement CSR Rules. These are under consideration of MCA.

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Policy on pay scales of Executives Policy on pay scales of Executives & wages of Workmen& wages of Workmen

DPE issues guidelines and renders advice to Ministries / Departments / CPSEs in matters of pay revision of executives and wage settlement of workmen of CPSEs.

97% employees are on Industrial DA pattern of pay scales. Rest are on Central DA pattern of pay scales.

2007 pay revision (for employees on IDA pattern of pay scales) based on the recommendations of the 2nd PRC is in vogue w.e.f. 01.01.2007.

Adoption of 2007 pay scales is subject to a CPSE’s ability to afford and sustain the burden of pay revision without budgetary support from Govt.

Most CPSEs on IDA pattern pay scales have adopted the 2007 pay scales while 47 CPSEs due to non-affordability are still in 1997 / 1992 / 1987 pay scales.

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CDA pattern of pay scales (based on Govt’s approval of 6th CPC Report) extended to CPSEs w.e.f. 01.01.2006. Adoption of revised pay scales also based on affordability criterion.

Management of CPSEs negotiate the wage structure for the workmen with Trade Unions / Associations. DPE only issues broad guidelines.

An important aspect of wage negotiation is to ensure that wage revision for workmen does not come in conflict with the pay revision of executives and non–unionised supervisors.

The periodicity of wage settlement (7th Round) for the workmen in CPSEs is for 10 / 5 years. The last wage revision was from 01.01.2012 for five years. 21

Board for Reconstruction of Public Sector Board for Reconstruction of Public Sector Enterprises (BRPSE)Enterprises (BRPSE)

An Advisory Body to address the task of strengthening, modernization, reviving and restructuring of Central Public Sector Enterprises (CPSEs) and to advise the Government on strategies, measures and schemes related to them.

It is proposed to strengthen this organisation.

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RECOMMENDATIONS OF BRPSERECOMMENDATIONS OF BRPSE ( (as on 31.08.2014as on 31.08.2014))

GOI/Holding Companies approved revival of 48(out of 58) CPSEs and closure of 4 (out of 6)CPSEs.

Total assistance given ` 41,140 crore from Govt. of India/holding companies.

Total no. of employees benefited 2,15,500.

19 CPSEs declared turnaround.

Scheme to incentivize top management. 23

THANK YOUTHANK YOU

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