Saturday, November 22, 2014

It's final: Government to shut down six sick PSUs completely

CLOSE on the heels of finance minister Arun Jaitley's announcement that the government was willing to consider the privatisation of sick state-run firms, the Centre has finally begun the process of shutting some of them. This may not go down well with tens of thousands of employees of the six sick PSUs who have been pinning...
hopes on the new Modi-led NDA government that had earlier made clear that it would revive sick PSUs.
A senior government official was quoted in a leading financial daily as confirming that a Cabinet note proposing the closure of six firms under the department of heavy industry has been circulated.
The list includes Hindustan Photo Films, HMT Bearings, HMT Chinar Watches, Tungbhadra Steel, Hindustan Cable and the iconic HMT Watches.
In the second round, 15 more loss-making firms will be under consideration, including British India Corporation, IDPL and their subsidiaries.
"Once this gets through, we will look at those firms where no production activity is being carried out or are totally closed," the official was quoted as saying.
Government data shows there are 61 sick central public sector enterprises (CPSEs) that had 1.53 lakh employees as on March 31, 2013. The government has been paying the salaries of all these employees largely through the budget.
However, HMT watches have been in high demand following indications the company could be shut.
Earlier, Jaitley had said that the government would look at privatising some of the loss-making public sector undertakings as taxpayers could not keep picking up the tab.
"I am open to looking at some PSUs that could do better in private hands," Jaitley had said at the World Economic Forum's India Economic Summit. He said that loss-making firms were being sustained merely on government support, which is not a permanent solution.
The Cabinet note seeking closure of the six companies proposes to offer a voluntary retirement scheme (VRS) option at the 2007 pay scale for around 3,600 employees in these firms, along with additional benefits such as encashment of leave and gratuity.
"This could amount to a total package of Rs. 1,000 crore," said an official from the heavy industry department. Earlier, heavy industry minister Anant Geete had said his department was drawing up a proposal for a onetime settlement costing around. Rs. 1,000 crore for employees of six PSUs that are not capable of revival.
"It would be better to make a onetime settlement and eliminate higher recurring expenditure," he had noted.
A committee of secretaries headed by Cabinet secretary Ajit Seth has also approved new parameters for revival of sick PSUs.
The government has also set up a committee under the NTPC chairman to explore the possibility of setting up a separate entity funded by financially strong CPSEs to look at management and revival of sick companies. Profitable PSUs have also offered to bail out loss-making companies provided their efforts are counted toward mandatory 2 per cent corporate social responsibility (CSR) norms.


  1. India FM says the sick psu is profitability in private players thats mean our bureaucrats are inefficient,better you will give the india to private they will make india 100 percent better than all of you.MODI-JI also cheating innocent sick psu employees and their families.psu's are shut down because the LAND BANK.The NATIONAL ASSETS LOOTED BY POLITICIANS WITH MNC'S.GOOD POLICY,KEEP IT UP.IF YOUR BUREAUCRATS ARE ALL NOT EFFICIENT THEN WHY THE GOVT PAYS LACKS AND LACKS FOR THEIR SALARY.WHAT IS THE USE OF THIS OFFICERS.PLEASE THINK.They will enjoying the govt benefits till their last breath after their retirement as committee head,chairman,etc.....

  2. The equality of pay among the working class cannot be achieved when the government seems to be ignorant or is giving a deaf ear to the woes of the employees of the loss making central PSU’s. The Pay commission recommended the pay revision in 1997 and 2007 which has not been implemented in many of the companies till date. Worst of all is that some companies got Governments has given approval for the implementation of 1997 pay scale, but the Government order was issued that 1997 pay revision to be implemented for the employees on rolls as on 28th. Feb.2014. What? about the employees who worked in the company and retired from the company between 31st January 1997 and 31st.Feb.2014. Is this not Injustice that has been meted to the Retirees during that (Jan. 1997 and Jan.2014) period?
    As is known to everybody the EPF pension is also between Rs. 1000 to Rs.2000 only. What is going to be the fate of the Industrial workers who have to retire with no benefit? Many of the Employees have not received their earned leave encashment for the leaves that were Balance to their credit on the date of Retirement.
    Has the pay revision anomaly occurred due to the fact that the companies have not given the actual status of the people that deserve to be included in the list of Employees who are also to be considered while implementing the pay revision? It may also be noted that the retirement age of many of the PSU’s is 58 years which means that the people are also made to retire early. I am yet to receive My E.L. Encashment amount till date from 2010.
    I only wish to bring these points in order to make the government and the Public sector Secretaries to be a little sympathetic and come to the rescue of the Retirees.
    Kindly look into the Injustice done.
    Retd.Deputy General Manager
    HMT Machine Tools Ltd, Bangalore

  3. Do immidiately seek psu clouser/private some psu not paid salary their employees due to not available fund

  4. To whom soever it may concern,
    Kindly note that some of the public Sectors like HMT have not paid the Earned leave
    Encashment Money to the retiring Employees under the pretext that it would be paid when Funds are available, but earned leave en-cashment money to existing employees is being Paid without a stop every year.
    Why is Pay revision that also of 1997 scale ( not 2010) , implemented only to the employees existing on rolls as on 28th February 2014, and the retirees are not even being considered Why? Are the retired employees not a party of the society? People retired about 5-6 years back have not received El. encashment also till date.
    Is the Social security act not applicable to the retired employees?
    Where is social security,?
    Kindly also bear in mind that the prices of commodities and medical expenses are
    not different to employees and retired employees of loss making PSU's.
    The Industrial Pension is also very meager and does not have any DA component added to take care of inflation.
    I feel that Depriving the benefits of pay commission recommendation to loss making Psu employees is not Justified and also depriving the retired employees whenever the pay revision is implemented is not correct.
    It looks that the Government is Punishing the employees/Retirees for no mistake of theirs. Kindly note that Retired employees Come under the Senior Citizen category.
    When will the government give social security to these retirees who are helpless.
    These people cannot fight a legal battle also as they cannot afford.
    Even Letters to the General Manager/Managing
    Director/Joint General Manager( Finance) have given no
    Hope this letter to you may open the eyes of the Government and this new Government may do some Justice.

    Retired in 2010

  5. There seems be to no Point in commenting when it is not going to be published if comments speak about injustice being meted to the Retirees from sick Public sector enterprises. the secretaries and the ministers are either ignorant or not at all concerned. Even the top management is not interested to address the issue at the right forum and insist for Justice. Once a person Retires the company forgets him.