Norms Issued for Closure of CPSEs

IAS Prelims 2023

Faced with inordinate delay in closing down sick Central Public Sector Enterprises ), the government has come out with timelines for disposal of movable assets, sale of land and retrenchment of employees not opting for voluntary retirement.

Niti Aayog has identified 74 loss-making public sector undertakings. Of these, sources said 26 have been recommended for closure.

The Department of Public Enterprises (DPE) has issued the guidelines in this regard.

As per the timelines laid down by the DPE, the retrenchment of employees of such CPSEs who have not opted for VRS has to be completed within four months from the ‘Zero Date’, the date of issue of minutes of approval for closure of sick or loss-making CPSEs by the Cabinet or Cabinet Committee of Economic Affairs.

The wages, salaries and other statutory dues have to settled within three months from the Zero Date.

The VRS package will be as per the 2007 notional pay scale, irrespective of the grade in which the CPSE operates “for release of employees”.

Settlement of statutory dues and liabilities towards revenue and tax department has to be completed within three months while payment to secured creditors has to be done in two months.

The sale of leasehold or freehold land needs to be completed within six months. Central government departments will get priority if these want to purchase land, followed by central government bodies or CPSEs, state government departments and state government bodies or state PSEs.

In case no offer is received within six months from the Zero Date, the disposal of immovable asset will be done through an auctioning agency to any entity.

Land would be sold as per the approved land use. In case the land is not sold, the property will be used for the public purpose, including affordable housing or other central government flagship programmes.