In its report tabled in the Parliament on Tuesday, the Committee tightened some provisions pertaining to the interests of existing employees and raised the protection period, from one to three years. These changes have been recommended after the Committee’s discussions with employees and the West Bengal government where the defunct public sector company is located.

In its report, the Committee says that it took cognisance of views of the West Bengal government that the existing service conditions of the employees should be extended to three years after recognising “the fact that the pay scales of the employees have not been revised since 1987 and need to be revised expeditiously so that the VRS could be calculated on the basis of the new scales”.

The decision to exit the tyre manufacturing business was taken by the UPA government in April this year through Tyre Corporation of India (Divestment of Ownership) Bill. The bill was thereafter referred to the Parliamentary Standing Committee on industry. What is interesting about this particular PSU is that the UPA government wanted to first bailout the company through a revival package before considering the option of inviting joint ventures. The bailout for the PSU that went defunct more than 14 years back involved a mix of waivers and tax sops amounting to more than Rs 800 crore.

Faced with objections in the cabinet, the decision was to completely exit the business of tyre-making and at the same time enable the company to enter into a joint ventures as well.