Friday, September 2 2005 16:35 Hrs (IST) - World Time -

New Delhi: The Government today (Sept 2, 2005) decided to merge its security presses, mints and paper mill into a corporation to improve their productivity and financial performance.

The Government will provide Rs 700 crore interest free loan in the form of working capital at the initial stage for setting up of the corporation, Defence Minister Pranab Mukherjee told reporters after a cabinet meeting.

These nine different organizations come under the Economic Affairs Department of the finance ministry.

"It has been decided to corporatise all these nine organizations into one corporation" Mukherjee said.

The wholly owned corporation would be tentatively named as the Security, Printing and Minting Corporation of India and be under the Department of Economic Affairs, Finance Ministry, he said.

"The corporation will come into effect from October 1 or any other date decided by the Government", Mukherjee said.

The nine organizations comprise of four mints, four-security press and one security paper mill, he said. The corporation would take over the assets, liabilities, functions and employees of all the nine units as on September 30th, 2005 or any other date fixed by the Government, Mukherjee said.

He said the corporation would take over the existing employees of the units on the existing terms and conditions initially on deputation basis for two years within which they will exercise their option for absorption in the newly formed corporation.

"The corporatisation process is aimed at overall improvement in decision-making process, operational flexibility coupled with commensurate accountability, efficiency and higher productivity of the units," he said.

The minister said the manpower and managerial deployment will be optimized and promotion policies, rewards and remuneration structure linked with the performance and productivity.

Two units have already been corporatised earlier, he said.