Tuesday, August 16 2005 19:45 Hrs (IST) - World Time -

New Delhi: Asserting it cannot go on paying salaries of workers of sick public sector companies, the Government today (Aug 16, 2005) said companies, which cannot be revived, would have to be wound up.

"Totally sick companies are a drain on resources. They are too sick to be revived and would have to be wound up," Finance Minister P Chidambaram said winding up the discussion on supplementary demands for grants of Rs 14,661 crore with cash outgo of Rs 6818 crore for the current fiscal.

The supplementary demands for grants were approved by Parliament after the Rajya Sabha returned it by a voice vote. These had earlier been passed by Lok Sabha.

Chidambaram said the Board for Reconstruction of Public Sector Enterprises has been set by the United Progressive Alliance Government (UPA)not for revival or restructuring but for reconstruction, and funds would not be a constraint for companies that can be reconstructed.

"Only some of the companies can be reconstructed. For that we have set up National Investment Fund that will be managed by public sector fund managers and returns from the fund would be given for capital expenditure to profitable, revivable and viable PSUs," he said.

Chidambaram said the Government has given a grant twice to sick companies to pay dues of their employees but this cannot go on.

Painting a rosy picture of the economy, Chidambaram projected a higher economic growth this fiscal as compared to last year as all the three sectors of the economy were doing well.

With manufacturing and services recording a double digit growth and agriculture expected to do well after negative growth last year, the economic growth is bound to be higher this year, he said.

"Last year the agriculture did not perform well but the industry and services did well. This year of the 39 meteorological divisions, 31 have reported normal to excess rainfall and there are two more weeks of North-West monsoon to go," he said.

Job creation is a function of economic growth, he said adding "This year, more jobs will be created than in the last two years."

After a generous devolution of funds from the central pool of taxes as recommended by the 12th Finance Commission, the states were flush with funds, he said adding no state now suffers from overdraft.

"I have written to them (State Governments) that this is time to spend on plan. Money has been made available to them in the first quarter itself," Chidambaram said.

Earlier participating in the debate, Bharatiya Janata Party (BJP) leader Kalraj Mishra asked from where the Government would raise funds for the ambitious Bharat Nirman programme.

Chittabrata Mazumdar of Communist Party of India (CPI) Marxist (M) and E M Sudarsana Natchiappan (Cong) participated in the debate.