The Narendra Modi government's ordinance promulgated last Friday would help block attempts to strip nationalised textile units of prime real estate worth Rs. 200 billion across 14 states, a top government official said.
The ordinance makes it clear that the National Textile Corporation (NTC) only holds the land as a custodian for the Centre and bars the corporation's eviction from properties after expiry of the original lease.
Leasehold properties account for 828 of the 2,200 acres of land occupied by sick textile mills nationalised and handed over to the NTC for their revival. Nearly 25 acres occupied by four mills in Mumbai alone is conservatively valued at R55 billion.
"It is a bold move to safeguard public interest," the senior government official told HT on conditions of anonymity.
The government had first started debating the ordinance route during the previous UPA's tenure after the Supreme Court's 2011 ordered eviction of NTC's Podar mill -- that has 558 employees on its rolls -- from a 2.5 acre plot in south Mumbai's Chinchpokli area.
But UPA leaders reportedly developed cold feet.
Once the new government was sworn in, civil servants put the plan on the table again. With textiles minister Santosh Gangwar and the PM putting their weight behind the plan, the law ministry - which had held back its approvals earlier - too came on board.
Since properties held by the Centre are protected from the rent control laws, the clarification ensured that the NTC cannot be forced to vacate properties where the original lease period had expired.