Mega economic package okayed

The highlight of today’s decisions, of course, was the Golden Handshake of Rs 517 crore to enable the government to close down 8 chronically sick PSUs.

The proposal toclose down these units was taken by Industry Minister Sikander Bakht several months ago, but could not be implemented since, under the law, no voluntary retirement benefits can be offered to sick PSUs. The last time around also, the Cabinet deferred a decision on the matter, fearing a political backlash. Today, however, the Cabinet passed the modified formula suggested to close these units. There are around 11,000 employees employed by these units. The BIFR had earlier recommended that these units be closed down. The PSUs, excluding Cycle Corporation, have registered a net loss of Rs. 182.87 crore in 1996-97 alone and in most cases the BIFR’s efforts to find possible joint venture partners have come to nought.

The PSUs are the National Bicycle Corporation, Cycle Corporation, Bharat Process and Mechanised Engineering Weighbird India, Mining and Allied Machinery Corporation, Tannery and Footwear Company, Rehabilitation Industries Corporation, National Instruments and Bharat Ophtalmic Glass.

In addition, theCabinet also cleared the proposal to restructure the sick Instrumentation India and to spin off its three units into separate joint ventures.

The Cabinet cleared the proposal moved by Power Minister Rangarajan Kumaramangalam to allow duty-free imports of equipment for around 8 identified mega power projects which would be used for feeding around 20,000 MW of power into a national power grid across the country — the current import duty is 22 per cent. The Cabinet also approved of a financial security package for this — eventually, the states will have to give guarantees for the power they buy through the funds made available by the Planning Commission. Kumaramangalam said that zero-import duties would lower the cost of power generation considerably. A scheme was also evolved to give the state-owned BHEL a price preference and deemed export benefits — with zero duties, BHEL would be badly hit by the new policy of duty-free imports.

In keeping with the country’s obligations to the World Trade Organisation(WTO), the Cabinet cleared the concept of a `mailbox’ system to deal with patent applications till such time as the country formally adopts the product patents regime. With around 29,000 applications for patents still pending, the Cabinet also cleared an industry ministry proposal to modernise Indian patent office at a cost of Rs. 75 crore. "Modernisation of patent office would help speed up scrutiny of patent applications and make the office and expert body," an official spokesman told reporters soon after the two hour meeting.

The Cabinet also approved of a major overhaul of the Land Acquisition Act of 1894 to reduce the time taken for land acquisition for industrial and other purposes to a maximum of one year. The rates of compensation have also been hiked dramatically for this purpose.

HIGHGHTS