Sources said that the textiles ministry had put forth a set of proposals including shutting down of the unviable units by offering VRS and selling off the units which could be made viable to private parties. The GoM, under the chairmanship of the finance minister Yashwant Sinha, which is scheduled to meet here on July 6, will examine all these proposals and take a final decision, the sources said.

While the Government was committed to protecting the interests of the workers, the GoM would have to find ways to pay the statutory dues of the employees of the the ailing NTC mills, the sources said. Issues like paying back creditors, and a viable VRS scheme would also be discussed, they added.

Last week, five central trade unions had asked the Centre to discuss revival of NTC with them before taking any final decision. However, official sources said views of the trade unions regarding restructuring of the NTC mills was known to the textiles ministry and added that all labour issues would be addressed by the labour minister who was a part of the GoM. The trade unions had claimed the textile ministry had not convened a single meeting with them since 1998, and had urged the finance minister, as chairman of the GoM formed, to convene a meeting with them.

The unions have also threatened to agitate against a reported move to close down all NTC mills in at least five states, West Bengal, Uttar Pradesh, Madhya Pradesh, Gujarat and Punjab.

Sources said that operating all the 119 mills was no longer possible for the Government as it was spending as much as Rs 600 crore annually on paying the wage bills of these loss-making units.

The land on which these mills are situated, especially those in Mumbai, could fetch a sizeable amount of money, if these units are sold. And the GoM would also vet this proposal to garner funds for VRS as well as repaying creditors like IDBI, sources said.

Once the proposal to restructure NTC mills was finalised by the GoM, it would be fowarded to the cabinet for ratification.

The textiles ministry also plans to restructure the ailing National Jute Mills Corporation after the revival of NTC goes through but the non-availability of modern technology abroad could make restructuring and modernisation difficult, they said.