Lok Sabha Question No. 262 (STARRED), answered on 2017-03-21
Subject: Revival of Closed PSUs/Industrial Units
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: SHYAMA CHARAN GUPTA

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES DEPARTMENT OF PUBLIC ENTERPRISES

## LOK SABHA

## STARRED QUESTION No. *262

## TO BE ANSWERED ON 21 st  March, 2017

## Revival of Closed PSUs/Industrial Units

## *262.   Shri Syama Charan Gupta:

Will the Minister of HEAVY INDUSTRIES & PUBLIC ENTERPRISES be pleased to state:

- (a) whether  the  Government  has  any  scheme  or  action  plan  to  protect  sick  public  sector undertakings  and  for  revival/  rejuvenation  of  PSUs/industrial  units  which  have  been closed down;
- (b) if so, the details thereof indicating the details of the PSUs/industrial units where revival plan is being implemented, State and location-wise including Naini in Allahabad;
- (c) the  action  taken  by  the  Government  to  provide  means  of  livelihood  to  the  workers employed in the sick/closed down PSUs/industrial units including in Naini, Allahabad; and
- (d)  whether  the  rising  dues  of  the  workers  in  these  units  is  leading  to  unrest  among  the workers and if so, the corrective steps being taken by the Government in this regard?

## ANSWER

## THE MINISTER OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES (SHRI ANANT G. GEETE)

- (a) to (d): A statement is laid on the Table of the House.

* * *

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(a) &  (b):  Central  Public  Sector  Enterprises  (CPSEs)  function  under  the  administrative control of various Ministries/Departments. The concerned administrative Ministry/ Department is  responsible  for  revival/rejuvenation  of  sick  CPSEs/Units  including  those  located  in  Naini, Allahabad which have been closed down.

Department of Public Enterprises (DPE) deals with policy issues applicable to CPSEs. DPE, as a nodal Department of CPSEs has, inter alia, issued guidelines for revival and restructuring of sick/ incipient sick and weak CPSEs on 29.10.2015 which are administered and implemented by the administrative Ministries/Departments in respect of CPSEs functioning under their control. As per the guidelines issued on 29.10.2015, the concerned administrative Ministries/ Departments are responsible to monitor the performance of the CPSEs and take remedial steps by formulating revival/restructuring/ disinvestment/closure plans for CPSEs and after obtaining the approval of competent authority, implement the plans.

As  far  as  the    Department  of  Heavy  Industry  (DHI)  is  concerned,  it  has  been  undertaking appraisal  of  the  status  of  each  CPSE  on  case  to  case  basis  and  the  ones  having  profitability potential are supported to improve their performance while the chronically sick and loss making companies  are  closed  down  with  attractive  compensation  to  the  employees.  The  details  of approvals  of  the  Government  in  respect  of CPSEs  under  the  administrative  control  of Department of Heavy Industry are given in Annex-I.

(c):  The  interests  of  the  employees  are  kept  in  view  by  the  administrative  Ministry/Department while  formulating  revival/restructuring  plans  which  include  provision  of  VRS,  settlement  of employee related dues, statutory dues, etc. The guidelines issued by DPE for time bound closure of CPSEs on 07.9.2016, inter alia, provides for payment of VRS at 2007 notional pay scale. Further, the  Counselling,  Retraining  &  Redeployment  (CRR)  Scheme  of  the  Government  provides opportunities  of  self/wage  employment  to  the  employees  or  their  dependents  separated  under Voluntary Retirement Scheme (VRS)/ Voluntary Separation Scheme (VSS) or retrenched due to closure/restructuring of the CPSEs. The  Scheme  aims  at providing short duration skill development/  entrepreneurship  development  training  programmes  to  equip  the  beneficiaries  for self/ wage employment.

(d): DPE does not maintain the data centrally on the dues of the workers in these units. As far as dues of workers in CPSEs/ units under DHI are concerned, the details are at Annex-II. DPE has no information on unrest among the workers due to their dues. However, there are no reports of labour unrest in the CPSEs/Units under closure functioning under DHI.

## PART A:

## Status of closure of CPSEs

|   S. No. | Name of CPSEs                       | Date of Decision   | Current Status                                                                                                                                                                                                                                                                                                                                                                                              |
|----------|-------------------------------------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        1 | HMTBearings Ltd.                    | 06.01.2016         | All employees of the these companies have been relieved through VRS/VSS except 146 employees of Ranibagh Unit                                                                                                                                                                                                                                                                                               |
|        2 | HMTWatches Ltd.                     | 06.01.2016         | of HMT Watches Ltd. who moved to High Court and obtained stay on closure of the company. Matter is                                                                                                                                                                                                                                                                                                          |
|        3 | HMTChinar Watches Ltd.              | 06.01.2016         | subjudice.                                                                                                                                                                                                                                                                                                                                                                                                  |
|        4 | Tungabhadra Steel Products Ltd.     | 22.12.2015         | VRS completed with all employees relieved and dues settled.                                                                                                                                                                                                                                                                                                                                                 |
|        5 | Hindustan Cables Ltd.               | 28.09.2016         | All employees of HCL (except 125 employees of Naini Unit, Allahabad) relieved on VRS. Naini Unit has been transferred to HAL with 125 employees.                                                                                                                                                                                                                                                            |
|        6 | Hindustan Photo Films Mfg. Co. Ltd. | 28-02-2014         | 466 employees have been relieved through VRS and 167 employees are still on the rolls of the company. The matter of appointment of Official Liquidator was last heard on 1 st and 2 nd March, 2017 in the Hon'ble High Court of Madras. Matter is subjudice.                                                                                                                                                |
|        7 | HMT Ltd. (Tractor Division)         | 27.10.2016         | Government has approved closure of HMT Tractor Division of HMT Ltd. with attractive VRS / VSS package at 2007 notional pay scales to its employees. An Amount of Rs.303.68 Cr. has been released to the company on 19.1.2017 for VRS/VSS purpose. An additional fund amounting to Rs.240 Cr. was released to the company on 10.2.2017 for VRS/VSS.                                                          |
|        8 | Instrumentation Ltd. (Kota Unit)    | 30.11.2016         | Government has approved closure of Kota Unit of Instrumentation Ltd. with attractive VRS/VSS package at 2007 notional pay scales to employees of Kota Unit of Instrumentation Ltd. including the payment of pending salary, statutory dues etc., which amounts to approximately Rs.438 crore. Accordingly, VRS/VSS for Kota Unit's employees has been opened on 8 th December, 2016 upto 18 th March, 2017. |

## PART B: Strategic Disinvestment of CPSEs:

Government, on 27.10.2016, has given in principle approval for strategic disinvestment/ merger of CPSEs under DHI as per below:

- (i) 100%  disinvestment  of  Bridge  &  Roof  Co.  Ltd.,  Scooters  India  Ltd.  (Lucknow),  and Bharat Pumps & Compressors Ltd. (Naini, Allahabad)
- (ii) Disinvestment of 100% shareholding of the concerned CPSE in Hindustan Newsprints Ltd. to strategic buyer through two stage auction process.
- (iii)Units  of  Cement  Corporation  of  India  Ltd.  to  be  disinvested  where  it  is  legally permissible to strategic buyer through two stage auction process.
- (iv) Merger of Engineering Projects (India) Ltd. with similarly placed CPSEs.

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## Annex-II referred to in part (d)  in reply to Lok Sabha Starred Question No.262 for reply on 21.3.2017

## Status of the dues in r/o CPSEs under closure

|   S. No. | Name of CPSEs                       | Current Status                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|----------|-------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        1 | HMTBearings Ltd.                    | All employees of the these companies have been relived through VRS/VSS except 146 employees of Ranibagh Unit of HMT Watches Ltd. who moved to                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|        2 | HMTWatches Ltd.                     | High Court and obtained stay on closure of the company. Matter is subjudice. An amount of Rs. 427. 81 crore was approved by the Cabinet Committee on                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        3 | HMTChinar Watches Ltd.              | Economic Affairs (CCEA) towards VRS / VSS out of which, Rs. 381.24 crore has been released so far. Further, HMT Watches Ltd. has sought funds from DHI for payment of salary for the period from January, 2016 to March, 2017 of Rs.19.00 cr. (for 815 employees relieved between January to June, 2016 - Rs.10.70 crore and for 146 employees of Watch Factory Ranibagh who did not opt for VRS - 8.30 crore). In this regard, company has been asked to explore alternate measures including sale proceeds of movable assets to arrange at their own.                                                        |
|        4 | Tungabhadra Steel Products Ltd.     | VRS completed with all employees relieved and all dues settled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|        5 | Hindustan Cables Ltd.               | All employees of HCL (except 125 employees of Naini Unit, Allahabad) have opted for VRS. Naini Unit has been transferred to HAL with 125 employees. Amount of Rs. 250.98 crore has been released for VRS / VSS. Dues have been settled in all cases except 21 cases due to technical reasons.                                                                                                                                                                                                                                                                                                                  |
|        6 | Hindustan Photo Films Mfg. Co. Ltd. | 466 employees have been relieved through VRS and 167 employees are still on the rolls of the company. Matter is subjudice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|        7 | HMT Ltd. (Tractor Division)         | 849 employees out 1001 have been relieved on VRS/VSS. An Amount of Rs.303.68 Cr. has been released to the company on 19.1.2017 for VRS/VSS purpose. An additional fund amounting to Rs.240 Cr. was released to the company on 10.2.2017 for VRS/VSS and the balance amount which is still to be released is Rs.175.04 Cr. Employee representatives have filed writ petition v/s Union of India, DHI and HMT Ltd. challenging order on closure of tractor unit. Hearing was held on 3.3.2017 and was adjourned to 20.3.2017. Ministry of Labour & Employment accorded permission of closure of units of Tractor |

|        |                                  | Division. 152 employees did not opt for VRS/VSS and approached High Court against closure decision. High Court has granted stay against closure.                                                                                                                                                                                                                                 |
|--------|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| S. No. | Name of CPSEs                    | Current Status                                                                                                                                                                                                                                                                                                                                                                   |
| 8.     | Instrumentation Ltd. (Kota Unit) | VRS/VSS for Kota Unit's employees has been opened on 8 th December, 2016 upto 18 th March, 2017. Government has approved an amount of Rs. 438 cr. approximately for the purpose of payment of pending salary, statutory dues etc. of its employees, which amounts to approximately Rs.438 crore. Further action to release the amount would be initiated when VRS/VSS is closed. |

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