THE government on December 17 said it has submitted closure proposals related to four companies including three HMT units and Tungabhadra Steel to CCEA for approval.
"Cabinet notes for closure of four unviable public sector companies namely HMT Watches Ltd, HMT Chinar Watches Ltd, HMT Bearings Ltd, and Tungabhadra Steel Products Ltd, have been finalised and submitted to the...Cabinet Committee of Economic Affairs (CCEA) for approval," Minister of State for Heavy Industries and Public Enterprises G M Siddeshwara said in a written reply in the Rajya Sabha. "As regards the fifth unviable public sector company namely Hindustan Cables Ltd, a draft Cabinet note has been circulated for inter-ministerial consultation," he added. The Cabinet had earlier given in-principle approval for shutting down the five PSUs. With the individual proposals for closure, the Ministry of Heavy Industries and Public Enterprises will approach the Cabinet for funds to grant VRS to some 2,800 staffers of the five state-owned firms. "We are going to give them (employees) good package through VRS," Union Heavy Industries and Public Enterprises Minister Anant Geete had earlier told PTI. While employees drew salary as per the 1997 pay scale, VRS will be based on the 2007 figure, Geete had said. Earlier, the government found it tough in shutting down five sick PSUs even after the move was cleared by the cabinet as the Prime Minister's Office and the defence ministry sought a review of the decisions.
The closure of Hindustan Cables has been held up due to the defence ministry, which showed interest after some of the employees approached the government seeking a review of the move. The hold up in case of four other state-run companies - three entities from HMT and Tngabhadra Steel -is due to the some objections made at the PMO level.
While approving the closure, the cabinet had said the employees should be given voluntary retirement scheme at the latest scales to make the deal attractive. For those who didn't opt for VRS, the plan was to give them three months notice under the Industrial Disputes Act and get rid of the employees.
The heavy industry department suggested that moveable assets be disposed off through an auction for which MSTC is expected to be roped in.