Govt set to revamp HMT and HEC with Rs 3000 package

GOOD news for two PSUs. The Modi government is mulling Rs 3,000-crore package comprehensive national policy to revamp the indigenous capital goods sector and the ambitious plan will be enforced from December. Two state-owned PSUs: HMT and the Ranchi-based Heavy Engineering Corporation (HEC) — would be part of the policy which will...
have a thrust on indigenization, technology assimilation and skilling, reports a leading financial daily.
The move is being taken in conformity with Make in India and Skill India initiatives and it will aim at reducing the Indian industry’s import dependence for machinery and equipment. Currently, around 37 percent of India’s capital goods demand is met by imports and there are policies like the export promotion capital goods scheme to help investors reduce cost of machinery imports.
According to the report, the Centre will allocate Rs. 2,000 crore to revamp HMT in collaboration with Germany, including its famous Fraunhofer Institutes and research establishments and set up skill development institutes in the PSU’s premises. The move will help HMT focus on its core expertise, which is manufacturing of machine tools, but at the higher end of the value chain with the latest German technology.
The government has already decided to shut shop for three loss-making units of the PSU — HMT Watches, HMT Bearings and HMT Chinar Watches. Around 2,900 workers in these sick PSUs would be offered a voluntary retirement scheme (VRS).
Another Rs. 1,000 crore would be released to modernise HEC, using Russian and Czech technologies. HEC manufactures equipment for mining, crushing, mineral processing and steel plants, besides producing cranes, castings and forgings. The Czech Republic has offered financing support to boost exports from HEC and the government is negotiating for concessional rates. The Centre is also in talks with Russia for soft loans to set up a “Centre of Excellence in Design” for heavy equipment at HEC’s Ranchi campus. The government is also considering using the existing resources in HMT Watches’ Bengaluru campus to establish a National Machine Tool Institute and start skilling programmes. The institute could have branches in the HMT units in Karnataka, Uttarakhand, Telangana and Jammu and Kashmir, as well as in the firm’s campuses in Rajasthan, Haryana and Kerala.