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CCEA decides to shut 3 HMT units; offers VRS to employees

Time:07 Jan,2016
Government on Wednesday decided to close three unviable units of HMT including the once popular HMT Watches, along with HMT Chinar Watches and HMT Bearings, by offering an "attractive" voluntary retirement scheme (VRS) to the employees as per 2007 pay scales. "With a cash assistance of Rs 427.48 crore, the three loss making subsidiaries of HMT Ltd, namely HMT Watches, HMT Chinar Watches and HMT Bearings will attain closure after separation of about a thousand employees through attractive VRS/VSS and settlement of their dues," an official statement said. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi. The CCEA has "given its approval for offering attractive VRS/VSS packages at 2007 pay scales to mitigate the hardships being faced by the employees of HMT Watches, HMT Chinar Watches and HMT Bearings and close their operations," the statement said. The movable and immovable assets of the companies will be disposed of as per the Government policy. The Cabinet had earlier given in-principle approval for shutting down five public service undertakings (PSUs) under the Heavy Industries Ministry including the three units of HMT, Tungabhadra Steel and Hindustan Cables after which the individual proposals entailing VRS etc. of the company were firmed up for the CCEA approval to go ahead with the closure formalities. The CCEA had approved the individual closure proposal of Tungabhadra Steel last month. There are 31 Central Public Sector Enterprises (CPSEs) under the Department of Heavy Industry engaged in manufacturing, consultancy and contracting services. Out of these, 12 are making profits. The remaining 19 CPSEs are incurring losses. The Department of Heavy Industry has been undertaking appraisals of each loss making CPSE to assess the prospects of revival. As a part of this exercise, the loss making CPSEs having the potential of turn around are revived and those found chronically sick are disinvested or closed down after payment of due compensation to employees.
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