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Government today approved a proposal to shut down the loss-making Kota unit of Instrumentation Limited and hand over the company's Palakkad division to the Kerala government.
The employees of Kota unit will be offered a voluntary retirement or voluntary separation scheme (VRS or VSS) package as per the 2007 notional pay scale, amounting to Rs 438 crore.
"The Union Cabinet chaired by Prime Minister Narendra Modi has approved closure of Kota Unit of Instrumentation Ltd and transfer of Palakkad unit of Instrumentation Ltd to the Government of Kerala," an official statement said.
"In this connection, the Cabinet has approved attractive VRS/VSS package at 2007 notional pay scales to employees of Kota Unit of Instrumentation Ltd, including the payment of pending salary, statutory dues etc, which amount to approximately Rs 438 crore."
While the Kota unit of Instrumentation Limited has been in the red for many years, Palakkad's has been making profit.
"While the Kota unit has around 500 employees, the Palakkad unit has over 300 employees," a senior government official told PTI.
Union Heavy Industries Minister Anant Geete had earlier written to Rajasthan and Kerala governments requesting them to take over the units.
Employees of the Palakkad entity had been demanding that the Centre either delink it from its loss-making mother unit in Kota or merge with a profit-making PSU.
In February, the government had approved hiving off profit-making Rajasthan Electronics and Instruments Limited (REIL) from its parent company Instrumentation Ltd and turning it into an independent central public sector enterprise (CPSE) under the Department of Heavy Industry.
REIL was a joint venture between Rajasthan State Industrial Development and Investment Corporation (RIICO) and Instrumentation Ltd, Kota, with 49 per cent and 51 per cent ownership, respectively.
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