The government today approved implementation of the 1997 pay scale along with increase in the retirement age from 58 to 60 for the employees of PSUs like the HMT Machine Tools Limited and Indian Telephone Industries (ITI) Ltd.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA). "The implementation of 1997 pay revision will be from the date of approval with one time relaxation of the Department of Public Enterprises guidelines," an official statement said.
The government today also approved a soft loan of Rs 200 crore for paying salaries to employees of loss-making PSU Indian Telephone Industries (ITI) Ltd.
The move is expected to mitigate the hardship being faced by the company in paying its employees. The ITI Ltd had 7,633 employees as on December 1, 2013. The decision was taken by the Cabinet Committee of Economic Affairs (CCEA).
"The soft loan will ensure that employees of ITI Ltd receive their salaries on time and motivate them to work in the company, which is on a slow and steady come back trail from being a 'sick' company," an official statement said.
Bangalore-based ITI Ltd was established in 1948 and converted into a PSU in 1950. It is the first PSU in the country. The company incurred accumulated losses to the tune of Rs 4,527 crore as on March 31, 2013.
The present level of losses of ITI Ltd is on account of a lack of profitable orders and heavy interest burden on borrowings. With shrinking of demand for fixed telephone lines, the company had diversified its business from production of fixed lines equipment to GSM equipments, trading activities and turnkey projects.
Meanwhile, for HMT, the government has also made a provision of non-plan loan of Rs 61.04 crore at 7 per cent interest per annum spread over two years (2014-15 and 2015-16) to bear the additional impact of implementation of 1997 pay revision.
Besides, it has sanctioned Rs 75 crore as non-plan loan for working capital purposes. The CCEA in its decision has empowered the board of the company to increase the age of retirement from 58 to 60 years for 10 per cent of the employees retiring in any year. Guidelines in this regard would be formulated, it said.
It also waived interest on a government loan of Rs 38.58 crore (upto March 31, 2014). The financial implication of the proposal in the form of non-plan loan would be Rs 136.04 crore. HMT Machine Tools Ltd was carved out as a subsidiary of HMT Ltd in 2000 with head office in Bangalore.
The company has facilities for manufacturing various types of machine tools and printing machines in its units located at Bangalore, Pinjore, Kalamassery, Hyderabad and Ajmer.
The work force of the company as on June 30, 2013 was 2,806. The company has authorised share capital of Rs 800 crore and paid up share capital of Rs 719.60 crore.
