What is the News?
Union Cabinet has approved the closure of loss-making Handicrafts and Handlooms Export Corporation of India Ltd(HHEC).
About Handicrafts and Handlooms Export Corporation of India Ltd(HHEC):
- It is a central public sector undertaking (CPSE) established in 1958 under the administrative control of the Ministry of Textiles.
Mandate/Objectives of the Handicrafts and Handlooms Export Corporation:
- To undertake exports of handicrafts, handlooms products, khadi and products of village industries from India.
- The HHEC undertake special promotional measures in countries. Especially in countries that the import potential is not fully realized for Indian handicrafts products, khadi and products of village industries.
- To trade in and carry on business in goods of any nature where the HHEC can trade conveniently and profitably.
Why is the government closing Handicrafts and Handlooms Export Corporation?
- HHEC has been incurring losses since the financial year 2015-16. Further, the HHEC is not earning sufficient income to meet its running expenses. There is also very little scope for its revival, necessitating the closure of the company.
- Further, the decision to close HHEC is in line with the government’s strategic disinvestment policy. Under the policy, the government aimed to disinvest completely in non-strategic sectors. The HHEC falls under the non-strategic sector.
About Public Sector Enterprise Policy:
The government of India has released a New ‘Public Sector Enterprise Policy’. The policy classifies public sector commercial enterprises into the strategic and non-strategic sector:
- Strategic Sector: There would be a maximum of four public sector companies in strategic sectors such as atomic energy, space, defence, power, coal, telecom, banking among others.
- Non- Strategic Sector: The central public sector enterprises (CPSEs) of this sector shall be privatized or closed, if privatization is not possible.
Source: Business Today