Fearing ‘enormous’ job losses, the Centre of Indian Trade Unions (CITU) has termed the Centre’s decision to dissolve the Bureau of Industrial Finance and Reconstruction (BIFR) as ‘destructive’.

“The BIFR under the provisions of Sick Industrial Companies (Special Provisions) Act has been entrusted with the revival and rehabilitation of sick industrial companies, both in public sector and in private sector. Dissolution and discontinuation of BIFR and AAIFR, its appellate authority, has struck a fatal blow to thousands of sick industrial companies referred to BIFR, despite possessing potential for revival and rehabilitation,” Tapan Sen, General Secretary, CITU, said in a statement.

Referring to a communication sent to all Chief Secretaries of the State governments January 2 by the Secretary, Ministry of Corporate Affairs, Sen said if the decision is implemented, the resultant job losses for those sick companies referred to BIFR but are remaining operational will be “enormous.”

Blaming ‘faulty’ government policies for sickness in both public and private sector, Sen flayed the government for citing the provisions of Insolvency and Bankruptcy Code Act 2016 and the Companies Act 2013 that sick companies whose cases are pending with BIFR will have to now file fresh cases for insolvency resolution before National Company Law Tribunal.

“Exploring possibilities and prospects of revival and rehabilitation of the sick companies concerned is not the mandate of NCLT which is mainly concerned with clearance of dues of the stakeholders viz., creditors etc,” CITU said, adding that the Act was skewed against workers.

“Workers dues have been subjected to a cap of maximum 24 months salary prior to liquidation, whereas clearance of dues of a secured creditor has been made capless,” he added.

As per the Reserve Bank of India, there were 4,80,280 sick small and medium enterprises in 2016, which have about Rs 32,600 crore as oustanding with banks.

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