Union Cabinate Approves Strategic Sale of Bharat Pumps and Wind Ups Hindustan Cables- Important [ Current News (Concise) - Policies & Governance ]
The Union Cabinet has given green signal for sale of loss-making Bharat Pumps and Compressors Limited after 12 years. Jessop & Company - a state-run company was last sold through this route. Cabinet has also directed to windup Hindustan Cables that stopped production in 2003.
- With this approval more than 4,800 crore rupees will be spend to pay statutory dues to employees and creditors.
- Prime Minister Narendra Modi chaired Cabinet Committee on Economic Affairs (CCEA) has permitted a proposal to provide a non-Planned loan to the public sector unit (PSU) Bharat Pumps and Compressors Limited.
- CCEA approved ‘in principle’ strategic disinvestment of the company to be implement in next stage. Rs.111.59 crore loan will be used to pay provident fund, gratuity, and dues payable to the Central Industrial Security Force.
- The cabinet approved the closure of Hindustan Cables and offered Rs. 305 crore one-time settlement to a consortium of its lenders and its employees led by State Bank of India.
Background for Closing Hindustan Cables
- No production activity in the company since January 2003 because of non-payment of salary and wages.
- Department of public enterprises (DPE) under the ministry of heavy industries and public enterprises had already suggested ministries for closing down non-strategic PSUs that do not have any hope for revival in a time-bound manner.
Revival Policies of Government
- Public sector firms will be divided into strategic or non-strategic and their revival or restructuring strategies will be suggested by the ministries.
- A uniform policy will be introduced by center government to provide voluntary retirement to workers of firms which cannot be revived and modalities for disposing off their assets.
- Leasehold land would be allocated to central government departments, central government bodies and public sector enterprises, state government departments, and state government bodies or public sector firms as per the terms of the lease and freehold land.
- If none of these entities is interested to take land of a PSU then it will be closed down and land would be auctioned for productive use.
- Published on: September 29, 2016