Britain's Department for International Development has sanctioned West Bengal an aid of Rs 180 million for a premature retirement scheme in its ailing industries.
The state has identified 24 sick units, which will either be revived in joint ventures with private partners, run with lesser staff or completely closed down.
This is reportedly the first instance of a foreign aid agency pitching in with funds to sponsor a lay-off scheme in state-owned factories.
The sanctioned amount is part of a larger financial package that the British agency is contemplating granting the state for effective implementation of the voluntary retirement scheme in all of the 24 sick units.
Official sources said the Rs180-million grant will be used for paying compensation to the employees of two units -- Indian Pulp and Sunderban Sugarbeet -- that will be closed down.
The state's industrial restructuring department last year classified the 24 units into structurally non-viable, non-viable enterprise requiring capital investment and potentially viable units.
The VRS scheme in the ailing units was suggested by a standing committee on industry.
The scheme could affect over 6,000 employees, but the government says it could try to re-deploy the surplus workforce.
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