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Centre to Shut Down Handicrafts & Handlooms Export Corporation, Offers Voluntary Retirement to 65 Employees

(Right to left) Union Ministers Prakash Javadekar, Ravi Shankar Prasad and Santosh Gangwar during a press conference on cabinet decisions, at National Media Centre in New Delhi on December 9, 2020. (PTI Photo/ Shahbaz Khan)

(Right to left) Union Ministers Prakash Javadekar, Ravi Shankar Prasad and Santosh Gangwar during a press conference on cabinet decisions, at National Media Centre in New Delhi on December 9, 2020. (PTI Photo/ Shahbaz Khan)

The move is supposed to benefit the government exchequer in reducing recurring expenditure.

The Union cabinet on Tuesday gave its nod to shut down loss-making Handicrafts and Handlooms Export Corp. of India Ltd (HHEC), and to offer voluntary retirement to all its 65 employees.

“There are 59 permanent employees and six management trainees serving in the corporation. All the permanent employees and management trainees will be given an opportunity to avail the benefit of a voluntary retirement scheme (VRS) according to the norms laid down by the Department of Public Enterprises (DPE),” the cabinet statement said.

The move is supposed to benefit the government exchequer in reducing recurring expenditure on salary/wages of the sick CPSE (central public sector enterprise), which is not in operation and earning no income. The export body is under the administrative control of the textiles ministry.

The corporation has been continuously incurring losses since 2015-16 and not earning sufficient income to meet its running expenses. “There is little scope for its revival, necessitating closure of the company,” the statement added.

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As part of cost rationalisation drive in a pandemic year, the government has been readying recommendations to either shut or merge a number of its own departments and divisions.

According to a report by Moneycontrol last year, the Centre is preparing recommendations to merge Registrar of Newspaper with Press Council of India, India Brand Equity Foundation under Department for Promotion of Industry and Internal Trade into Invest India, and publication division under Information and Broadcasting ministry, into Bureau of outreach and Communication, among others.

The government is also planning to shut down almost a dozen autonomous bodies to rationalise costs. Some of the autonomous bodies that might be shut down are the National Productivity Council (NPC) and the Tariff Commission, among others, Moneycontrol had reported earlier.

The Union Textile Ministry in August abolished the All India Handicrafts Board and the All India Handloom Board — advisory bodies that were created to help the government in “formulation of the overall development programmes” in the handicrafts and handloom sectors, “keeping in view socio-economic cultural and artistic perspective.”

This was followed up with abolishing another advisory body – the Cotton Advisory Board. The government also notified that all eight Textiles Research Associations have ceased to be ”affiliated bodies” of the ministry.