Cabinet approves closure of three HMT units

Tribune News Service & PTI

New Delhi, January 6

The Cabinet Committee on Economic Affairs (CCEA) today approved the closure of three HMT units — HMT Watches, HMT Chinar Watches and HMT Bearings. The decision was taken at the meeting chaired by Prime Minister Narendra Modi.

An official statement said, “With a cash assistance of Rs 427.48 crore, the three loss-making subsidiaries of HMT Ltd., namely HMT Watches Ltd, HMT Chinar Watches Ltd. and HMT Bearings Ltd. will attain closure after separation of about a 1,000 employees through attractive VRS/VSS and settlement of their dues”.

The employees will receive Voluntary Retirement Scheme (VRS) benefits at 2007 pay scales.

The movable and immovable assets of the three companies will be disposed of as per government policy, the statement added.

The Cabinet had earlier given in-principle approval for shutting down five 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 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.