Government unable to shut five sick PSUs despite cabinet clearance

NEW DELHI: The government has made little headway in shutting down five unviable public sector companies months after the move was cleared by the cabinet as the Prime Minister's Office and the defence ministry have sought a review of the decisions.

The closure of Hindustan Cables has been held up due to the defence ministry , which showed interest after some of the employees approached the government seeking a review of the move. While the defence ministry was interested in taking over the PSU "lock, stock and barrell", it has only ended up holding up the exercise and has not come up with a formal proposal, said sources. The hold up in case of four other state-run companies - three entities from HMT and Tngabhadra Steel -is due to the flip-flop at the level of the PMO.

While approving the roadmap for the closure, the cabinet had said the employees should be given voluntary retirement scheme at the latest scales to make the deal attractive. For those who didn't opt for VRS, the plan was to give them three months notice under the Industrial Disputes Act and get rid of the employees.

The heavy industry department had suggested that moveable assets be disposed off through an auction for which MSTC is expected to be roped in. When it came to immovable property , the government had decided to transfer land and building to state or central government or PSUs.Land that had been leased was to be returned to the state governments. "In the absence of this kind of a policy , officers will be reluctant to sell a company , fearing an investigation later," a source argued, explaining the rationale.

When everything seemed to be on course for the Centre to finally shut down cash guzzlers, the PMO sought a review of the land disposal policy in what many see as a fallout of the government's inability to get Parliament to amend the land acquisition law.