Maharashtra to shut six loss-making units

Mafco and Chitali Distillery to be privatised, stake in Haffkein Institute to be divested

As part of its financial restructuring, the Maharashtra government today decided to wind up six loss-making corporations and also privatise Mafco Ltd and Chitali Distillery Ltd. The state government has also decided to divest the government's stake in the Haffkein Institute.

The decision was taken at the state Cabinet's weekly meeting on Wednesday. Speaking to the media later, Chief Minister Vilasrao Deshmukh said, "The Cabinet has decided to implement the recommendations of the Upasni Committee regarding loss-making corporations. The process would be started within three months."

The corporations whose fate has been sealed include the Maharashtra Land Development Corporation, four regional development corporations along with subsidiaries that include development corporations for Konkan, Marathwada, Vidarbha and western Maharashtra, and Kolhapur Film City Corporation.

The committee headed by former chief secretary Sharad Upasni had recommended the winding up of these corporations nearly two years ago, but the decision was pending as the concerned departments did not put up the recommendations before the state Cabinet.

It was also decided that the liquidation of the six corporations would be carried out by the finance department instead of the parent department to speed up the process, Deshmukh said.

However, on the positive side, Deshmukh made it clear that employees of these organisations would be given voluntary retirement scheme. As there are no vacancies at the disposal of the government, these employees cannot be accommodated, he said.

The state government had started receiving recommendations from the Upasni Committee since 2002 in a phased manner, but since none of the departments, which run these corporations, came up before the Cabinet with concrete proposals it was decided that the finance ministry would be given responsibility of carrying out the recommendations, said a senior official from the ministry.

Besides, today's decision also fixed 'three months' the timeframe, within which start process has to start, the official pointed out.

He further said the Upasni Committee felt the Haffkein Institute can be turned into a viable unit by carrying out a modernisation and technological upgrade programme, requiring around Rs 80 crore. The government has decided to seek fresh private equity for this purpose.

A senior state finance department official said the timeframe for the closure and the disinvestment is yet to be worked out.