Cabinet Approves Closure of National Jute MfG. Corp. Ltd. & Its Subsidiary Birds Jute (Download PDF)

()

Download PDF of This Page (Size: 685.86 K)

Union Cabinet has approved closure of National Jute Manufactures Corporation Ltd. (NJMC) & its subsidiary Birds Jute & Exports Ltd. (BJEL). Available land w/both CPSEs will be put up for public use/other govt. use for overall development of society.

Image of National Jute Manufactures Corporation

Image of National Jute Manufactures Corporation

Image of National Jute Manufactures Corporation

Procedure for Closure

  • Disposal of fixed assets as well as current assets will be in accordance w/guidelines of DPE & proceeds from sale of assets, after meeting liabilities, will be deposited in Consolidated Fund of India.

  • In accordance w/DPE guidelines, Land Management Agency (LMA) will be engaged for disposal of assets. LMA will be directed to carry out thorough verification of assets before undertaking their disposal in accordance w/DPE guidelines.

  • Ministry of Textiles does not propose to use any land or building of BJEL for its own purposes or for any of its other CPSEs & Land Management Agency will be informed upfront accordingly.

Benefits of Closure

  • Decision will benefit Govt. exchequer in reducing recurring expenditure incurred in operating both sick CPSEs in running their activities.

  • It will help in closing loss making companies & ensuring release of valuable assets for productive use, or for generating financial resources for developmental progress.

Image of uses of jute

Image of Uses of Jute

Image of uses of jute

Background of National Jute Manufactures Corporation and BJEL

NJMC:

  • NJMC was formed in – 1980.

  • Its Headquarter - Kolkata

  • NJMC is incurring losses for several years & was under reference to BIFR since 1993.

  • Company’s primary product was hessian jute bags used for packaging of food grain used by various State Govt.

  • Demand for hessian bags has eroded over years & to that extent, it is found to be no longer commercially viable to run company

  • Mills of NJMC which were proposed for revival, namely, Kinnison Mill at Titagarh, Khardah Mill at Khardah & RBHM Mill at Katihar are under suspension since August, 2016.

  • NJMC would not be in a position to recoup its negative net worth thru operational profits. NJMC has no staff/workers on its rolls.

BJEL:

  • BJEL, subsidiary of NJMC, was referred to BIFR, which had considered Revival Scheme.

  • Draft Revival Scheme could not be implemented because conversion of land use was not agreed to by West Bengal Govt. & representative of State Govt. to ASC was nominated after 3 year delay.

  • BJEL has no staff & as factory is not in operation; closure does not have any adverse implications.

- Published/Last Modified on: December 6, 2018

Policy/Governance, Economy, Agriculture/Agro Industries

Monthy-updated, fully-solved, large current affairs-2019 question bank(more than 2000 problems): Quickly cover most-important current-affairs questions with pointwise explanations especially designed for IAS, NTA-NET, Bank-PO and other competetive exams.