Payment of statutory dues, salary and wages in 10 sick / loss making CPSEs under the Department of Heavy Industry

Payment of statutory dues, salary and wages in 10 sick / loss making CPSEs under the Department of Heavy Industry

The Cabinet Committee on Economic Affairs today approved the proposal for providing non-plan budgetary support of Rs.59.72 crore for liquidation of statutory dues and salary and wages from 1.1.2011 to 31.3.2011 in respect of 10 sick / loss making CPSEs under the Department of Heavy Industry. A list of these CPSEs is given below.

Payment of outstanding dues of salary / wages would mitigate the hardship of the employees thereby motivating them for better output and prepare them to achieve the goal of revival / restructuring for the company. In addition clearance of outstanding statutory dues is likely to result in fulfilment of statutory requirement.

Revival / closure of these companies is yet to be finalized (except in the case of HMT Bearings Ltd. in which case revival plan already approved could not materialize and in case of NPPC, revival plan with the cash infusion of Rs.552 crore was approved in June, 2007 but it could not be implemented in view of steep cost escalation). Therefore, it was considered essential that the interim financial support from the Government be provided so that the operation of these companies will not be affected. Non settlement of these liabilities had been causing serious hardship not only to the employees of the companies but also adversely affecting the day-to-day operation of the companies resulting in further deterioration of their performance.

As a result of the revival plans approved in case of 16 CPSEs, seven CPSEs have turned around and have posted net profit presently. Initially in (May/June, 2004) there were 24 CPSEs which were defaulting in payment of wages / salaries. Now this number has come down to 10 due to comprehensive restructuring efforts.

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