DCVL inches towards closure

A classic case of sick public sector unit, the Development Corporation of Vidarbha Ltd (DCVL) is now on its last legs waiting for the inevitable. Set up in 1970 for the development of the Vidarbha region, the organisation is nearing closure.

The government had stopped funding the organisation in December 1992 and it was officially put up for closure. However, the state government allowed it to function as an unsupported organisation owing to the employment it provided and the recoveries it was slated to make.

In a unique case, salaries in the government organisation have been paid from the recoveries that the DCVL has been able to make from the region.

At present, its headoffice here is manned by a skeletal staff of 36 people compared to 1992 when the staff strength was 104. the company has been without a chairman for the last five years.

At present, DCVL's head office has only one job. Recovering the loans it gave under Employment Promotion Programme (EPP) and Package Scheme of Incentives (PSI), before these schemes were transferred to the District Industries Centre (DIC).

According to the acting managing director, A K Nigote, the recovery of the principal amounts under EPP is Rs 14.96 crore and it is Rs 8.87 crore under PSI. The interest component is 4 per cent in the former and 15 per cent in the latter, he said. The DCVL makes recoveries of around Rs 25 lakh of these outstanding loans on an average every year.

The loan amount still to be recovered is nearly Rs 24 crore. This will go to over Rs 35 crore if the interest amount is added. If the DCVL closes down without reclaiming this amount, it would lead to great financial loss to the exchequer. Nigote, however, said that the government will transfer the recovery process to the DIC, as has been done in the case of Development Corporation of Marathwada.

Most of the assets of DCVL were either sold or closed down. The company has been in litigation for the last 15 years and recently its lender, State Bank of India, was given possession of its assets in Kamptee by the Debt Recovery Tribunal. The bank is claiming dues of nearly Rs 40 crore from the company.

The corporation's only remaining assets are the two Rajnigandha Silk Emporium showrooms in Nagpur. They have combined annual sales of around Rs 20 lakh. The showrooms were the marketing arm of DCVL's silk production activity. At one time, they supported more than 3,000 weaver families in Bhandara, Chandrapur and Gadchiroli districts.

DCVL was one of the four regional development corporations formed by the Maharashtra government in 1970 in the state. The others were for Western Maharashtra, Konkan and Marathwada.

In its December 1992 decision, the government decided to close all the four RDCs. The RDC for Western Maharashtra, however, was later exempted from this decision due to its comparatively better health.

The Marathwada RDC has already closed down, while the Konkan RDC shares the fate of DCVL.

In its initial days, the DCVL was headed by illustrious industrialists such as Naval Tata (1970-72) and Ramkrishna Bajaj (1972-76) as its chairpersons. Its managing directors included P B Rajagopalan, who went on to become the state chief secretary.

The last managing director, Ramesh Bhambhode, left the organisation in July 2004. Joint Director, industry, A K Nigote has been given the additional charge of MD of DCVL.