The Maharashtra government has begun the process of merging the Maharashtra State Textile Corporation, Maharashtra State Powerloom Corporation Limited and Maharashtra State Handloom Corporation Limited, with the proposal now undergoing financial reconciliation at the level of the Comptroller and Auditor General of India.
The merger is intended to reduce losses, lower administrative and manpower costs and bring the operations of the three state-run corporations under a common management structure. The proposal will be placed before the Maharashtra Cabinet after the reconciliation process is completed and the Finance Department grants its approval, Textile Minister Sanjay Savkare said.
The move follows a recommendation by the Finance Department’s Public Sector Undertakings Committee that loss-making corporations should either be shut down or merged. The Textile Department subsequently began preparing a merger proposal for the three corporations.
According to the information reported by Loksatta, the handloom and textile corporations are currently loss-making. The powerloom corporation has reduced its losses, improving its financial position to the extent that employee salaries are being paid regularly. The report did not provide the corporations’ current loss figures or details of their outstanding liabilities.
The proposed merger would combine the work of the three corporations and allow them to operate with the available workforce. The government expects the arrangement to reduce administrative expenditure as well as spending on personnel. Following the merger, the combined entity would be managed by a single managing director instead of separate management structures.
The staffing position differs across the corporations. All employees in the Textile Department’s corporation have currently retired, while the Handloom Corporation has a mix of permanent and contractual employees. The government has not yet announced how employees, contracts, assets or liabilities would be handled after a merger.
The Department had prepared the proposal and forwarded it to the Finance Department. On the Finance Department’s instructions, the process of reconciling the financial records of all three corporations is being undertaken at the CAG level. This exercise is expected to establish the financial position of the entities before the proposal moves through the remaining approval stages.
The merger has not yet received Cabinet approval. The next formal steps are completion of the financial reconciliation, consideration by the Finance Department and submission of the proposal to the state Cabinet for a final decision.
