BUSINESS

Centre plans to shut two more sick PSUs

The Union Cabinet’s in-principle approval is already in place for closing down sick units including HMT Watches, HMT Chinar Watches, HMT Bearings, Hindustan Cables and Tungabhadra Steel Products.

The Union Cabinet’s in-principle approval is already in place for closing down sick units including HMT Watches, HMT Chinar Watches, HMT Bearings, Hindustan Cables and Tungabhadra Steel Products.  

The government plans to close down two more sick state-owned companies, a unit of HMT and Tyre Corporation of India Ltd. (TCIL), and is not considering to the surplus land of these firms to set up a land bank, Heavy Industry and Public Enterprises Minister, Anant Geete, said.

“We are discussing these proposals… Some (public sector undertakings) were approved for closure earlier. We have prepared individual proposals for them,” Mr. Geete said at an event organised by the CII.

The Union Cabinet’s in-principle approval is already in place for closing down sick units including HMT Watches, HMT Chinar Watches, HMT Bearings, Hindustan Cables and Tungabhadra Steel Products. Individual proposals for closure have been prepared by the ministry, which will soon be placed before the Cabinet for its final approval, Geete said.

Mr. Geete, however, did not disclose more details, including the specific HMT unit being considered for closure. Earlier, the government was planning to revive TCIL through the disinvestment route or joint venture. “We are not going in for disinvestment of any (loss-making central units),” Mr. Geete said.

Finance Minister Arun Jaitley had, on earlier occasions, said that the government ‘was not averse to strategic sales,’ of loss-making state-owned units and that the government would consider strategic sales ‘wherever possible.’

Through the strategic sale, the government aims to transfer management control of certain public sector undertakings (PSUs) to the private sector. However, this does not include sale of the government’s residual stake in some non-government companies.

In addition to the aim of raising around Rs.41,000 crore by disinvesting minority stakes (ranging from 5-15 per cent) in certain listed PSUs, the government is also targeting garnering around Rs.28,500 crore through strategic sales of PSUs.

On the proposed National Policy on Capital Goods, which among other things aims a long term, stable and rationalized tax and duty structure to ensure cost-competitiveness of the sector, Mr. Geete said it “will be finalised within 1-2 months and sent to the Cabinet for approval.” The government would take necessary steps to enable Indian steel industry to face intense competition from countries such as Korea and China.

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