The ministry of heavy industries has begun discussions with the finance ministry for setting up a Board for Reconstruction of Public Sector Enterprises as announced in the Budget for 2004-05.

Ministry officials said they had also informed North Block that a committee was yet to be set up to work out a  structure for the board. They were awaiting a formal communication from the finance ministry before undertaking any such exercise.

Since the heavy industries ministry has 48 public sector undertakings under it, which is the largest among all central ministries, it is pushing for the proposed board to be attached to it.

Ministry officials said in the past two months they had reviewed the status of the PSUs under it. This review, they said, could provide valuable inputs to the board.

The review, conducted by top ministry officials, had shortlisted 9 profit-making PSUs for strengthening, another 21 for revival, and 7 loss-making entities for closure.

In his Budget speech, Chidambaram had said the Board for Reconstruction of Public Sector Enterprises would advise the government on restructuring PSUs under the various ministries, including cases where divestment or closure or sale was justified.

The board will take over from the erstwhile Divestment Commission, set up by the previous National Democratic Alliance government, to advise the government on the modalities of sell-off.

In his post-Budget comments, Chidambaram said setting up of such a board was in consonance with the National Common Minimum Programme of the United Progressive Alliance government.

The government has decided to retain profit-making PSUs, while only the loss-making ones will be sold off after a transparent case-by-case evaluation.

The finance ministry has, therefore, set a modest target of Rs 4,000 crore (Rs 40 billion) to be realised from the sale of such PSUs in the current fiscal compared to the ambitious Rs 16,000 crore (Rs 160 billion) targeted by the previous regime.