Lok Sabha Question No. 2140 (UNSTARRED), answered on 2021-08-02
Subject: Privatisation of Visakhapatnam Steel Plant and BPCL
Ministry: FINANCE
Asked by: Sajda Ahmed, Rajiv Ranjan (Lalan) Singh, Kaushalendra Kumar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT (DIPAM)

## LOK SABHA UNSTARRED QUESTION No.2140 TO BE ANSWERED ON MONDAY, AUGUST 2, 2021 SRAVANA 11, 1943 (SAKA)

## Privatisation of Visakhapatnam Steel Plant and BPCL

## 2140.   SHRIMATI SAJDA AHMED:

SHRI RAJIV RANJAN SINGH ALIAS LALAN SINGH: SHRI KAUSHALENDRA KUMAR:

Will the Minister of FINANCE be pleased to state:

- (a)    whether  the  Government  has  finalised  the  privatization  plan  of  Visakhapatnam Steel Plant;
- (b)   if so, the details thereof along with the rehabilitation plan of the Government for the contractual employees of Visakhapatnam Steel Plant;
- (c)   whether it is a fact that BPCL has earned 7 times more profits this year as compared to previous year;
- (d)   If so, whether it is not a good sign of better operation of BPCL and if so, the details thereof; and
- (e)  Whether the Government is considering to review its decision to privatise BPCL and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR. BHAGWAT KISHANRAO KARAD)

(a)&(b): In  pursuance  of  the  decision  of  Cabinet  Committee  of  Economic  Affairs (CCEA) taken on 27.01.2021 for 100% disinvestment of Government of India's

shareholding  in  Rashtriya  Ispat  Nigam  Limited  (RINL)  alongwith  RINL's stake  in  its  Subsidiaries/Joint  Ventures  through  strategic  disinvestment  by way of privatisation, the process for engagement of transaction intermediaries like Transaction Adviser, Legal Adviser, Asset Valuer etc. has been initiated. While deciding the terms and conditions of strategic sale, legitimate concerns of existing employees and other stakeholders are addressed by incorporating appropriate provisions in Share Purchase Agreement (SPA)/Business Transfer Agreement (BTA).

- (c)&(d): Profitability  of  the  Oil  Marketing  Companies  (OMCs)  depends  on  several factors including global oil prices. During the year 2020-21, BPCL has earned Profit  After Tax (PAT) of Rs.19, 042 Crore as against PAT of Rs.2, 683 Crore during  2019-20.  The  major  contribution  of  earning  higher  profit  during  this year  is  mainly  on  account  of  sale  of  equity  shares  of  Numaligarh  Refinery Limited  (NRL)  [Profit  before  tax  from  sale  of  shares  of  NRL  was  Rs.9,422 Crore], higher inventory gains and adoption of new Income Tax rate during the year. Further, during the year 2019-20, in view of steep reduction in crude oil prices, depreciation of Indian rupee vis-à-vis US Dollar; BPCL has suffered huge  inventory  losses  and  foreign  exchange  losses  resulting  in  lower  Profit during that  year.  During the year 2016-17, 2017-18 and 2018-19 BPCL's PAT was  Rs.8,  039  Crore,  Rs.7,  976  Crore  and  Rs.7,  132  Crore  respectively. Therefore, since in both the years 2019-20 and 2020-21, profitability of BPCL is exceptional due to the reasons explained above, it would not be appropriate to compare these two years profit to judge the BPCL's operational performance.
- (e) No, sir.

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