The State Trading Corporation: Central trade unions have attacked the Union government’s policy to dilute its stake in the central PSUs. In the Union budget, finance minister Nirmala Sitharaman has set a target of mopping up Rs 1.05 lakh crore from disinvestment this year, which is an increase of Rs 15,000 over the previous year’s mop-up. Central trade unions like CITU, AITUC, INTUC, LPF, SEWA and HMS have threatened to oppose the commerce ministry’s proposal to shut down the state trading corporation (STC) and project and equipment corporation (PEC). “We are launching a mega protest rally in New Delhi on September 30 against the overall economic policies of the Modi government. The issue of sale of STC and PEC has been included in the agenda, said Tapan Sen, Politburo member of CPM.
“This is absolutely against the interest of the nation,” said the veteral trade union leader.
The Union government has established the state trading corporation in 1956. The PSU was mainly involved in trading with eastern European countries that were a part of the communist bloc led by the erstwhile Soviet Union. Later STC got involved in large scale imports and exports of chemicals and drugs and other bulk commodities such as edible oils, cement, sugar, newsprint, wheat, urea among other things.
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Fifteen years after the STC’s establishment, the government established PEC as a wholly-owned subsidiary of STC in 1971 to handle the export of railway and engineering equipment. Later the PEC was incorporated as an independent company in 1997.
But with the liberalisation, the stronghold of these PSUs over trading and import-export has long vanished and all the accounts of the company have turned into NPAs.
In FY 2018-19, the STC incurred a net loss of Rs 881 crore against the net profit of about Rs 38 crore in FY 2017-18. Though the STC has cleared lenders dues to the tune of Rs 1,100 crore last year but public sector lenders led by Syndicate Bank have already moved to the National Company Law Tribunal (NCLT) against the company.
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Commerce ministry has decided to shut down these two PSUs – the STC and the PEC while the country’s biggest public sector trader – MMTC Limited (erstwhile Minerals and Metals Trading Corporation) will be completely revamped. Commerce ministry is preparing a note for cabinet approval. However, the move has not gone down well with the trade unions and employee union federations.
Prime Minister Narendra Modi’s decision to merge 10 public sector banks into four large ones has already faced resistance from bank unions. And the proposal to completely shut down the STC and PEC has further irked them.
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“Everybody is opposing these moves. All the central trade unions and all the federations of employee unions of banking, insurance and defence sectors, except Bharatiya Mazdoor Sangh, will participate in the mega protest rally on September 30,” former Rajya Sabha member Tapan Sen told Financial Express Online.