The Board for Industrial and Financial Reconstruction (BIFR) has found 10 public sector undertakings (PSUs) under the department of heavy industry unviable and ordered closure of four of them.
The four undertakings are Mining Allied & Machinery Corporation Ltd, Tannery Footwear Corporation Ltd, Weighbird India Ltd and Bharat Pumps & Compressors Ltd.
Although the BIFR has also ordered closure of the other six PSUs, its decision has either been stayed by various high courts or the Appellate Authority of Industrial and Financial Reconstruction (AAIFR) has asked for a review.
The department has suggested that a one-time payment of Rs 160 crore be made to workers of these 10 undertakings under the voluntary retirement scheme(VRS).
The department has also agreed to extend the VRS to the workers of these undertakings for three months after the winding up notices are issued. Those who do not wish to opt for the scheme within the notified period would be eligible only for the statutory retrenchment compensation.
The six other PSUs which have been found unviable are: Cycle Corporation of India Ltd, National Bicycle Corporation Ltd, National Instruments Ltd, Bharat Opthamalic Glass Ltd, Reyroll Burn Ltd and Rehabilitation Industries Company Ltd.
An industry ministry brief indicating the new VRS scheme and the reasons for the proposed closure has been circulated among the central trade unions before a final decision is taken by the Union Cabinet.
The government has so far given financial assistance worth over Rs 750 crore to all the 10 PSUs. Their total turnover has been Rs 64 crore and they have a manpower of 12,000.
The PSUs represent less than 6 per cent of manpower and 0.68 per cent of the turnover of the 49 public enterprises under the heavy industries department. A total of 2 lakh employees work in the 49 public enterprises.
The ministry has pointed out that if a one-time payment of Rs 160 crore is given to the workers under the VRS, it would lead to savings of over Rs 60 crore in non-plan support every year. Besides, the assets of these companies would be released for productive purposes and after meeting the liabilities, the surplus can be pooled to the investment fund to strengthen the operations of the viable companies.
The ministry has constituted a monitoring committee under the chairmanship of the department secretary to review the implementation of the steps taken in respect of each of the units and submit a monthly report to the industry minister.
The government had pumped in Rs 378 crore as fresh infusion of funds while writing off of loans worth Rs 1,100 crore. Loans worth Rs 290 crore were converted into equity for the 10 undertakings.
In the case of National Bicycle Corporation, the appellate authority has directed that the plan submitted by the workers should be examined. For Cycle Corporation of India, the chairmans revival plan is being examined.
In the case of National Instruments Ltd, the high court has stayed the BIFR order. For Bharat Opthamalic Glass, AAIFR has allowed the appeal of the management and the workers to prepare a revival scheme. BIFR has extended the time for firming up the views of the government on the revival scheme in the case of Reyroll Burn.
BIFR has refused to register the case of Rehabilitation Industries Company as it has been given the status of a small scale industry.
