The Cabinet is likely to discuss the corporatisation of the loss-making Delhi Milk Scheme (DMS) on Thursday, paving the way for its acquisition by any other dairy firm.
"The proposal is to convert DMS into a corporate entity and enable takeover of its operations by well performing milk companies," a source said.
Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns Amul brand, has evinced interest in running the DMS plants.
The Cabinet note for DMS corporatisation was moved by the agriculture ministry.
GCMMF, leading milk supplier in Delhi-NCR, had also moved a proposal to the agriculture ministry in this regard. Amul wants to increase its presence in the national capital region.
The DMS has milk production and packaging capacity of 5 lakh litres per day, besides a network of 1,298 outlets in the NCR. DMS has 800 employees, but the milk production is only about 2.75 lakh litres per day.
However, its cumulative losses touched Rs 838.66 crore in 2011-12 from Rs 814.43 crore in 2010-11 and Rs 782.32 crore in 2009-10.