The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval for offering attractive VRS/VSS packages at 2007 pay scales to mitigate the hardships being faced by the employees of HMT Watches Ltd., HMT Chinar Watches Ltd. and HMT Bearings Ltd. and close their operations. The movable and immovable assets of the companies will be disposed of as per the Govt. policy.

With a cash assistance of Rs. 427.48 crore, the three loss making subsidiaries of HMT Ltd will attain closure after separation of about a thousand employees through attractive VRS /VSS and settlement of their dues.

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.