The government on Thursday approved steps for disinvestment in Tyre Corporation of India, a sick public-sector enterprise, under which it will allow the PSE to form a joint venture with a private company.
The disinvestment of the firm would be carried out through an amendment in Tyre Corporation of India Ltd (Disinvestment of ownership) Bill, 2007.
"The union cabinet today gave its approval for making necessary amendments in TCIL Bill, 2007 pending in Lok Sabha," Information and Broadcasting Minister P R Dasmusi told reporters here.
He said the company can be revived in a sustainable manner only through a joint venture, which would require a change in the nature of the PSE.
"As per the advice of the Ministry of Law and Justice, prior approval of Parliament is required for changing the nature of the PSE from a government company to a non-government company," Dasmunsi said.
TCIL was incorporated in 1984 as a wholly-owned central PSE to take over the responsibility of running two nationalised companies - Incheck Tyres and National Rubber Manufacturing.
Subsequently, its tyre manufacturing unit at Kakinara in Bengal was modernised and started commercial production in April 1994.
However, due to the shortage of working capital, the commercial operations could not be sustained. The corporation had to stop production under its own brand name and started making tyres for other reputed brand names.