Employees offered voluntary retirement scheme as per the 2007 pay scales

The Union Cabinet on Wednesday approved the closure of the iconic HMT Watches and offered a voluntary retirement scheme (VRS) to its employees as per the 2007 pay scales.

Two other unviable units of the public sector company, HMT Chinar Watches and HMT Bearings, are also to be shut down.

The movable and immovable assets of these companies will be disposed of as per the government policy, an official statement said after the decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi.

“With a cash assistance of Rs. 427.48 crore, the three loss-making subsidiaries of HMT, namely HMT Watches, HMT Chinar Watches and HMT Bearings will attain closure after separation of about a thousand employees through attractive VRS/VSS and settlement of their dues,” the statement said.

The Cabinet also gave its nod to the closure formalities of five public sector units (PSUs) under the Heavy Industries Ministry.

These include units of the Tungabhadra Steel and Hindustan Cables for shutting down which the government had earlier given an in-principle approval.

The decisions to shut down the loss-making PSUs have been taken on a case-by-case basis after the assessment of prospects for revival.

While the chronically sick companies are disinvested or closed down, those having the potential for a turnaround are revived.

In all, there are 31 Central enterprises under the Department of Heavy Industry of which 12 are making profits and the remaining 19 are incurring losses.