The Union Cabinet, chaired by Prime Minister Narendra Modi, has given green signal to the closure of National Jute Manufacturers Corporation Ltd. (NJMC) along with its subsidiary Birds Jute and Exporters Ltd. (BJEL).
Notably, NJMC was suffering losses for years and it was under reference to the Board of Industrial and Financial Reconstruction since 1993. It primarily used to manufacture hessian jute bags which are used for the packaging of food grain for different State Governments.
Furthermore, its mills; Kinnison Mill at Titagarh, Khardah Mill at Khardah and RBHM Mill at Katihar are facing a suspension since the last two years due to the failure of the job contractor to implement the job efficiently and problems with the local labour.
On the other hand, BJEL, the subsidiary of NJMC, was referred to BIFR, which had considered a Revival Scheme. The Draft Revival Scheme could not be enforced due to the West Bengal Government’s denial of converting the land use and the representative of the State Government to the ASC was nominated after a gap of three years and much like NJMC, BJEL has no staff and as the factory is not in operation; these closures do not affect any individual.
In a press statement issued, the central government marked out that the closure will benefit the government treasury in curbing down the continuous expenses taking place in operating both the ailing CPSEs in running their operations. The proposal will aid the centre to shutter loss-making companies and making a sure release of valuable assets for productive use, or for generating financial resources for development.
Additionally, the government also elucidated that the sale of fixed assets and current assets will be done in line with the guidelines of Department of Public Enterprises dated 14.06.2018 and the proceeds from the sale of assets, after handling liabilities, will be submitted to the Consolidated Fund of India.
A Land Management Agency (LMA) will be given the charge for the disposal of assets which will be authorised to conduct a complete verification of the assets before undertaking their disposal under the DPE guidelines.
The government mentioned in a statement issued that, “the Ministry of Textiles does 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.”