New Delhi, Jul 22: The government is unlikely to go ahead with the Commerce Ministry’s proposal for merger of trading firms MMTC and STC, a senior official said.
“It has been long that the Commerce Ministry forwarded the final cabinet note for the government’s approval. It looks unlikely now,” the official added.
State Trading Corporation (STC), Project & Equipment Corporation of India (PEC) and Metals & Minerals Trading Corporation of India (MMTC) are under the administrative control of the Commerce Ministry.
As per the proposal, the merger of the two trading firms would result in synergy of operations, which somewhat overlap.
The ministry had also suggested that the government bear the expenses for VRS (voluntary retirement scheme) to be offered to about 600-700 employees of STC.
While the government wholly owns PEC, it has about 90 per cent stake in MMTC and STC.
MMTC and STC were created in 1963 and 1956, respectively. PEC Ltd was carved out of STC in 1971-72.
According to industry observers, state trading companies like MMTC and STC have lost their relevance as well as business following liberalisation.
MMTC used to be a canalising agency for import and export of non-ferrous metals and fertilisers. Similarly, STC was an agency for import of essential items of mass consumption such as wheat, pulses, sugar and edible oils.
PEC was engaged in export and import of machinery and railway equipment.