End of the road for HMT tractor unit

New Delhi, October 27

The Union Cabinet today approved the closure of the loss-making tractor division of the HMT at Pinjore while sanctioning Rs 718.72 crore for the payment of outstanding salaries and other dues at the public sector entity.

The approval came during a meeting of the Cabinet, chaired by Prime Minister Narendra Modi.

“The Union Cabinet...has approved budgetary support to HMT Ltd for the payment of outstanding salary/wages and other employee-related dues. It also approved the closure of the HMT tractor division by offering attractive VRS/VSS at the 2007 notional pay scales,” an official release said.

The decision will have a financial implication (cash outgo) of Rs 718.72 crore for the payment of outstanding salary, wages and statutory dues, VRS/VSS ex gratia payments and clearing of the tractor division’s liabilities towards banks and creditors.

The tractor division has been incurring losses continuously and is unable to pay the salaries and other statutory dues of its employees based in Pinjore.

The employees have not been paid salary since July 2014 and other statutory dues are also pending since November 2013. The HMT tractor division was established in Pinjore in 1971 to manufacture HMT tractors.

“It was observed that continuation in the tractor business with its insignificant market share in the sector may not be a financially viable and sustainable option for HMT Ltd and hence it would be prudent to close the tractor business, make an exit from this segment and focus on the core sector of machine tools,” the government said.

“In view of the deteriorating position of the company and hardship being faced by the employees due to non-payment of salary/wages and other retirement dues, it has been decided to close down the tractor division of HMT Ltd by offering attractive VRS/VSS to its employees and clearing all their dues,” the release added. — PTI