The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the closure of loss-making Handicrafts and Handlooms Export Corporation of India Ltd (HHEC).
HHEC is a central public sector undertaking (CPSE) under the administrative control of Ministry of Textiles.
"There are 59 permanent employees and 6 management trainees serving in the Corporation. All the permanent employees and management trainees will be given an opportunity to avail the benefit of a Voluntary Retirement Scheme (VRS) as per norms laid down by the Department of Public Enterprises," the government said in a release.
The approval will benefit the government exchequer in reducing recurring expenditure on salary and wages of the sick CPSE which is not in operation and earning no income, it said.
HHEC has been incurring losses since financial year 2015-16 and is not earning sufficient income to meet its running expenses. There is little scope for its revival, necessitating closure of the company.
The decision to close HHEC is line with government's strategic disinvestment policy, under which CPSEs in non-strategic sectors will be privatised or closed.