Time has stopped for HMT Watches, finally. The brand, which is claimed to be a pioneer in horological industry in India since 1961, and its products for decades are known for its accurate time keeping and trouble-free performance that lasts a life time, will now stop manufacturing.

With an aim to close ailing public sector undertakings, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday approved closure of HMT’s three unviable units — HMT Watches, HMT Chinar Watches and HMT Bearings.

The government has also given approval for offering attractive severance packages at 2007 pay scales in order to mitigate hardships faced by employees of the three units. A government statement said the movable and immovable assets of the units will be disposed of as per the policy.

“With a cash assistance of Rs 427.48 crore, the three loss-making subsidiaries of HMT Ltd will attain closure after separation of about a thousand employees through attractive VRS / VSS, and settlement of their dues,” it said.

Senior management at HMT refused to comment on the development.

A recent media report had said that HMT Watches’ Ranibagh unit in Uttaranchal will open to manufacture its last batch of 5,500 watches worth Rs 1.5 crore, which will likely be completed by the end of 2014-15.

In 1961, HMT was the first company India to manufacture watches in India along with technical collaboration from Citizen Watch Co of Japan. Its first batch of watches was released by then Prime Minister of India Jawaharlal Nehru.

The Cabinet had earlier given in-principle approval for shutting down five PSUs under the heavy industries ministry, including the three units of HMT, Tungabhadra Steel and Hindustan Cables.