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The government intends to come out with a new land usage policy and severance scheme for workers following the proposal to close down four sick Central Public Sector Enterprises (CPSEs) — HMT Watches, HMT Chinar Watches, HMT Barings and Tungbhadra Steel.
However, the closure proposal for Hindustan Cables has been kept on hold as the Defence Ministry has agreed to reconsider its proposal to take it over through one of its CPSEs, while another CPSE, Andrew Yule, has shown interest in taking over Hindustan Photo Films, an official said.
Originally, the government had planned to close down six sick CPSEs. “Cabinet notes for closing down four CPSEs are expected to be taken up any time. These notes prescribe that land owned by a closed CPSE can be given to another CPSE. Also, VRS (voluntary retirement scheme) will have much clearer terms so that closing down of plants are not affected,” a senior government official told BusinessLine .
Land usageVarious CPSEs have two categories of land — acquired and that given by States on lease hold basis. The official said under the new use policy, lease hold land will be returned to the State government concerned, while land owned by the closed CPSE will be available for other CPSEs.
“Priority will be given to CPSEs of same Ministry (of the closed CPSE) in the distribution of land at a price. However, if a CPSE of another Ministry wants to acquire the land, it may be asked to pay a premium,” the official said, while ruling out giving the land to private industries.
The Ministry of Heavy Industries and Public Enterprises does not maintain a record of land available with CPSEs.
But, according to a rough estimate, the four CPSEs, Hindustan Cables and Hindustan Photo Films together own around 8,000 acres. Money raised through monetisation of land will be used for payment of statutory dues. A similar policy will be used for future closure proposals.
A deadline for availing of VRS and Voluntary Separation Scheme (VSS) is also on the cards to ensure that workers get the best severance package, the official said. “Almost 95 per cent of workers have taken VRS in one CPSE, while the remaining 5 per cent are still on the pay rolls, which is posing a problem in shutting it down,” the official said, adding that there will be clear provision for opting VRS/VSS within a fixed time.
Severance package“This means workers not opting for VRS/VSS within the fixed time will get lesser benefit at the time of closure,” he said, adding that a provision under Industrial Disputes Act will be part of the closure proposal.
The six CPSEs (originally planned for closure) have over 3,600 workers, with more than 1,000 workers in HMT Watches alone.
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