Hit during Covid, state-run National Textile Corp may be closed down by govt
An official said the production activities in the 23 mills of NTC were on until Covid-19 pandemic hit the country in March 2020
NEW DELHI The government is considering various options including closure of state-run National Textiles Corporation Ltd (NTC) along with its 23 mills as commercial production in these units has been suspended since Covid, at least three officials with direct knowledge of the matter said.
“NTC has a land bank of around 3,661 acres in prime locations, hence any such action would require proper planning,” one of them said.
“The ministry of textiles is expected to prepare an action plan on this matter soon after consulting the NITI Aayog and the Department of Public Enterprises (DPE),” he said.
Email queries sent to the government’s spokespersons, senior textiles ministry officials and the CMD of NTC on this matter elicited no response.
“This is a work in progress as per the new PSE (public sector enterprise) policy, which stipulates that a final decision will be taken by the competent authority,” a second official said.
Although the new government at the Centre is “by-and-large” expected to maintain the policy continuity, the matter could be placed before the Cabinet after a review, he added.
The government on February 4, 2021 notified the new PSE policy, which asked DPE to identify central public sector enterprises (CPSEs) for closure or privatisation in non-strategic sectors as per the recommendation of the administrative ministry, he said.
NTC is a non-strategic enterprise, he added.
According to a third person, production activities in the 23 mills of NTC were on until Covid-19 pandemic hit the country in March 2020.
Work was suspended in these mills due the nationwide lockdown.
After the lockdown was lifted, work at 14 mills were restored with the available raw materials from January 2021. Then the second wave of Covid-19 pandemic hit again, leading to the closure of all NTC mills in April 2021.
After that operations could not be restored to the normal level because of unavailability of working capital and other financial issues.
According to available data, the company had been posting net loss of over ₹300 crore annually since 2018-19 till 2022-23.
“The mills are sick because they are facing technical obsolescence, excess manpower, financial crunch and poor productivity,” he said.
The 23 National Textiles Corporation Ltd mills are located in the states of Tamil Nadu (seven mills) Maharashtra (five), Kerala (four), Madhya Pradesh (two) and one each in Andhra Pradesh, Gujarat, Karnataka, Kerala, and Puducherry.
According to the textile ministry’s annual report for 2022-23, NTC’s provisional net worth (the value of the company after deducting liabilities) was ₹920.10 crore.
