Govt orders study on future structure of MMTC, STC, PEC
New Delhi: The commerce ministry has commissioned a study to work out a new structure for three state-owned trading firms—MMTC, STC and PEC—a senior official said.
State Trading Corporation (STC), Project & Equipment Corporation of India (PEC) and Metals & Minerals Trading Corporation of India (MMTC) are under the administrative control of the ministry.
“There is lot of overlapping of their functions. We have asked an agency to look at whether we have to close or merge them; what should be their mandate; what more they can do in this changing world,” the ministry official said.
The ministry also wants to assess their revenue generation and understand the strengths and weaknesses of these three trading firms.
“Crisil is undertaking this study and soon they would submit their report. After that, the ministry will take a final view,” the official said. While PEC is wholly owned by it, the government owns about 90% stake in MMTC and STC.
MMTC and STC were created in 1963 and 1956, respectively. PEC Ltd was carved out of the STC in 1971-72.
According to industry observers, state trading companies like MMTC and STC have lost their relevance as well as business following liberalisation. MMTC used to be a canalising agency for import and export of non-ferrous metals and fertilisers. Similarly, STC was a canalising agency for imports of essential items of mass consumption such as wheat, pulses, sugar and edible oils.
PEC was engaged in export and import of machinery and railway equipment. After liberalisation, said an observer, the government de-canalised various items and now these state-owned firms which were set up as a specialised trading arm of the government lost their relevance.
Currently, these firms are engaged in exports and imports of items such as agro commodities like pulses.
In 2016-17, MMTC has incurred a loss of about Rs30 crore. STC too reported a loss of Rs16.5 crore in the last fiscal.