CPSEs get blueprint for shutting down subsidiaries; details here

The Centre has given new timelines for the disposal of assets and retrenchment of employees who are not opting for voluntary retirement schemes (VRS) in order to fast-track the closure of identified subsidiaries of the central public sector enterprises (CPSEs). This has been done to achieve closure of such units in less than nine months after getting approval from the competent authority. As per the guidelines of Department of Public Enterprises (DPE), the preparation of the subsidiary’s draft closure note and its approval by the parent CPSE Board has to be completed in five months from the date (T0) the department of investment and public asset management gets the approval of authorities for the closure of a unit. The boards currently do not carry the powers for disinvestment or closure of their subsidiaries, units, or stake in joint ventures. Hence, the holding CPSEs required the approval of Cabinet/CCEA for the closure of their downstream companies, no matter what is the size of operations or capital deployed by such subsidiaries. Within seven months of T0, the norms require the subsidiary to return leasehold land to the respective state governments, notify the labour ministry of the closure, and transfer freehold land to the National Land Monetisation Corporation. The rules also require the subsidiary to provide VRS to employees and statutory dues, transfer assets to holding company/administrative ministry, settle statutory dues/taxes, and dispose of secured creditors. The closure process will be completed in T0 plus eight months and 15 days with an application to the Registrar of Companies for the removal of the subsidiary’s name. The FY22 Budget revealed the strategic sector policy, which calls for the government to have a minimal presence in four broad sectors, while the remaining ones can be merged, privatised, or closed. Atomic energy, space and defence; transportation and telecommunications; power, petroleum, coal, and other minerals. and banking, insurance, and financial services are among these sectors. All CPSEs in the non-strategic sector are going to be privatised or closed if privatisation is not possible. In order to instill efficiency, the Narendra Modi government is preparing a reform blueprint that includes measures like listing such enterprises on stock exchanges, establishing tenures for top management, and increasing accountability for their boards. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.