Companies in Jharkhand will have to share profits

Ranchi, Nov 13 | Updated: Nov 14 2005, 05:30am hrs
Major industries including steel companies like Mittal Steel planning big-ticket investments in Jharkhand may soon be given specific targets to distribute profit among their employees.

The Jharkhand Government is in final stages of preparation of a resettlement and rehabilitation policy (R&R policy) for the state where it would be mandatory for all industries to make their employees partners in profit accruing to the company. Top-level state officials told FE that the policy is aimed to give a humane touch to the rapid industrialisation taking place in the state that has also resulted in displacement of indigenous people from land where they have been living for centuries. As per the R&R policy blueprint being finalised by the state government all companies making investment in the state would have to commit an identified portion of their profit in favour of employees. Such commitment would be sought by the state much before companies break even and start to make profit.

Moreover, under the new R&R policy companies would also be told to submit a specific rehabilitation and resettlement plan for families displaced by their projects. This plan would also include provision of suitable dwelling units, job guarantee to at least one member of the displaced family and provision of vocational training to others to make them employable.

Senior state government officials said the policy may also seek conversion of all large industries into public limited companies by off-loading a portion of the equity in the market. Such public offering may also include specific employees stock option plan (Esop). This proposal is still under discussion and no final decision has been taken yet, the officials said. The proposed move may impact the operation of companies like Mittal Steel, Jindal Steel and Power Ltd, JSW Steel, Essar Steel and other listed and unlisted companies intending to invest in Jharkhand. When reached, Jharkhand chief minister Arjun Munda said the policy would be announced soon but refused to give further details.