New Delhi [India], Oct 10 (ANI): The Union Cabinet on Wednesday approved the closure of the loss incurring Central Public Sector Enterprises (CPSEs), National Jute Manufactures Corporation Limited (NJMC) and its subsidiary Birds Jute and Exports Limited (BJEL).
The decision of the closure will benefit the Government exchequer in reducing recurring expenditure incurred in operating both the sick CPSEs in running their activities. The available land would be put up for public use for overall development of the society.
The proposal would help in closing loss-making companies and ensuring the release of valuable assets for productive use, or for generating financial resources for developmental progress.
NJMC was under reference to Board for Industrial and Financial Reconstruction (BIFR) since 1993. The company's primary product was hessian jute bags used for packaging of food grain used by the various State Governments. Over the years, the demand for hessian bags has eroded and to that extent, it has been found to be no longer commercially viable to run the company.
The Mills of NJMC which were proposed for revival, namely, Kinnison Mill at Titagarh, Khardah Mill at Khardah and RBHM Mill at Katihar are under suspension since August 2016.
After taking its past performance, market conditions, and the competition from plastics and the capacity of private jute mills into account, it was noted that NJMC would not be in a position to recoup its negative net worth through operational profits. Also, NJMC has no staff or workers on its rolls; therefore it was decided to be closed down.
A revival scheme was considered for BJEL, but it could not be implemented because conversion of land use was not approved to by the West Bengal Government and the representative of the State Government to the ASC was nominated after a three-year delay.
BJEL too had no staff and as the factory is not in operation and the closure does not have any adverse implications.
The fixed, as well as current assets of the companies, will be disposed of in accordance with the guidelines of the Department of Public Enterprises as on June 14, 2018. After the sale of assets meets the liabilities, the remaining will be deposited in the Consolidated Fund of India.
According to the DPE guidelines as on June 14, 2018, a Land Management Agency (LMA) will be engaged for disposal of assets. The LMA will be directed to carry out a thorough verification of the assets before undertaking their disposal in accordance with the DPE guidelines.
The Ministry of Textiles did not propose to use any land or building of BJEL for its own purposes or for any of its other CPSEs and the Land Management Agency will be informed upfront accordingly. (ANI)