The Cabinet today approved closing down two public sector units - Cycle Corporation of India and Maharashtra Antibiotics and Pharmaceuticals Ltd. It also sanctioned an additional 2 per cent dearness allowance (DA) for Central government employees and pensioners effective from July 1 this year. The Cabinet also cleared the Sampoorna Grameen Rozgar Yojana with an outlay of Rs 10,000 crore for the current fiscal.
Announcing this, parliamentary affairs minister Pramod Mahajan said the Cabinet has cleared the closure of the two PSUs after obtaining the nod of the Board for Industrial and Financial Reconstruction. Maharashtra Antibiotics, employing 247 employees, is a joint sector company set up by Hindustan Antibiotics, IDBI and the State Industrial Investment Corporation of Maharashtra in 1979. For Kolkata-based Cycle Corporation of India, the Cabinet has decided to offer a voluntary separation scheme (VSS) for a period of three months to all employees. This will cost the exchequer Rs 4.1 crore while the already retired 1,098 employees will be paid the difference on account of ex-gratia under VSS and voluntary retirement scheme (VRS).
To revive ailing PSU, Instrumentation Ltd (IL), the Cabinet has decided that Bharat Sanchar Nigam Ltd (BSNL) will reserve 10 per cent of its orders for telephone line exchanges for the company each year. The minister said this will be about 3.3 lakh telephone lines per year. Besides, BSNL will provide an advance of 50 per cent of the payment at the time of placing the order.
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In addition, the government will give a counter guarantee to IL for raising Rs 63 crore from the market. Of this, Rs 28 crore will go towards raising funds for working capital while the rest will go for meeting the cost of VRS to 500 employees of IL. Mahajan said the Cabinet has also approved IL's plan to scout for a joint venture partner besides financial restructuring.
Mahajan said the Centre's annual additional burden due to the DA hike will be Rs 586.86 crore. The cost to the exchequer this year will be Rs 391.8 crore. The total DA payable will now be 45 per cent for all employees and pensioners.
Under the centrally sponsored Sampoorna Grameen Rozgar Yojana scheme sanctioned by the Cabinet, every villager provided work will be paid 5 kg of foodgrains in addition to cash. The scheme was announced by the Prime Minister on August 15 this year.
Of the total outlay, Rs 8,750 crore will be provided by the ministry of rural development and the rest by the state governments. The total foodgrain requirement under the scheme is 50 lakh tonne for which the Food Corporation of India will be paid Rs 5,000 crore for meeting the economic cost of the grains.