Cabinet approves loan waiver of worth Rs.4 Cr against Sikkim Mining Corporation
Cabinet Committee on Economic Affairs (CCEA) has approved waiver of repayment of loan and interest thereon, of nearly worth Rs.4 crore outstanding against Sikkim Mining Corporation (SMC) including interest accrued on total amount from 1 April 2019, till this approval outstanding against SMC. CCEA is chaired by Prime Minister Narendra Modi.
Benefit: Further, accumulation of interest on principal loan will get extinguished and liquidation process of Corporation will get completed.
About Sikkim Mining Corporation (SMC)
It was established on the 27 February 1960 as Joint Venture (JV) undertaking of Government of Sikkim and Centre Government. SMC has been incurring losses every year since its inception.
Background: To optimise the financial health of SMC, a Consultant was engaged in 1999 which among other things suggested diversification of Corporation’s activities and also strengthening of technical staff in conjunction with cutting down of excess manpower at lower levels. However, in 2003, keeping in view the recurring losses incurred by SMC, recommendation of Accountant General of Sikkim as well as advice tendered by erstwhile Planning Commission both partners of JVC (State & Central Government) engaged a Consultant to spell out a road map for SMC’s future. Then on the basis of Consultants’s report & 107th Report of Public Accounts Committee (PAC) of State Legislative Assembly of Sikkim, State and Central Governments decided to close down SMC’s mining operations and to settle all its dues and liabilities. Consequently, SMC’s mining operations at Bhotang and Phachey Khani mines were closed down with effect from 1 January 2007. Liabilities towards employees of corporation were settled from amount release by erstwhile Planning Commission and Ministry of Development of North Eastern Region. Liabilities of the Corporation towards State Government of Sikkim were waived off by State Government of Sikkim and amount accrued from sale of scraps of machineries of corporation was returned to Government of India.
Category: Economy & Banking Current Affairs