MANU/PIBU/1144/2019

Department/Board : Press Information Bureau

Date : 17.07.2019

Cabinet approves Implementation of the Cabinet's decision dated 28.12.2016 regarding pharmaceutical companies in the public sector - seeking modification therein

The Union Cabinet chaired by Prime Minister Narendra Modi has approved the following decisions:

• Modifying the earlier decision dated 28.12.2016 of sale of land of PSUs to government agencies and instead permitting the sale of land as per revised DPE's guidelines dated 14.06.2018; and

• Providing budgetary support as loan to the tune of Rs 330.35 cr. for meeting the employees' liabilities (Unpaid salary - Rs. 158.35 cr. + VRS Rs.172.00 cr.) as per following break-up:

a. IDPL - Rs. 6.50cr.

b. RDPL- Rs. 43.70cr.

c. HAL - Rs. 280.15 cr.

(iii) Constitution of a Committee of Ministers for taking all decisions pertaining to closure/ strategic sale of the four Public Sector Undertakings, including the sale of assets and clearance of outstanding liabilities.

Major Impact:

• Budgetary support of Rs 330.35 cr. would help in disbursing the unpaid salaries and providing support for VRS of employees of IDPL, RDPL and HAL. The decision would mitigate sufferings of more than 1000 employees of these PSUs; and

• Setting up of a Committee of Ministers would expedite in process of implementation of the earlier Cabinet decision dated 28.12.2016 for closure of IDPL and RDPL and strategic sale of HAL and BCPL.

Background:

Cabinet had decided on 28.12.2016 to sell surplus land of Hindustan Antibiotics Limited (HAL), Indian Drugs & Pharmaceuticals Limited (IDPL), Rajasthan Drugs and Pharmaceuticals Ltd. (RDPL) and Bengal Chemicals & Pharmaceuticals Ltd. (BCPL) through open competitive bidding to Government agencies and clear the outstanding liabilities from the sale proceeds. It was decided that after meeting the liabilities, IDPL and RDPL would be closed and HAL and BCPL put up for strategic sale. Department took earnest efforts for sale of surplus land, but could not find buyers, despite issuing tenders more than once. Meanwhile, the Department of Public Enterprises (DPE) has issued revised guidelines on 14.06.2018 in respect of disposal of land of the PSUs. As funds could not be generated through sale of surplus land, the employees in few of the PSUs (HAL and RDPL) could not be paid salaries and VRS scheme floated. As such, it was decided to dispose of the land as per revised DPE's guidelines and seek up-front budgetary support for meeting employees' liabilities.