Lok Sabha Question No. 3453 (UNSTARRED), answered on 2021-12-20
Subject: Privatisation of Visakhapatnam Steel Plant
Ministry: FINANCE
Asked by: Talari Rangaiah, Goddeti Madhavi, Kuruva Gorantla Madhav, Chinta Anuradha

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT (DIPAM)

## LOK SABHA

## UNSTARRED QUESTION No.3453

TO BE ANSWERED ON MONDAY, DECEMBER 20, 2021

Agrahayana, 29, 1943 (SAKA)

## Privatisation of Visakhapatnam Steel Plant

3453.   SHRI TALARI RANGAIAH: SHRIMATI GODDETI MADHAVI: SHRI KURUVA GORANTLA MADHAV:

SHRIMATI CHINTA ANURADHA:

Will the Minister of FINANCE be pleased to state:

- (a) Whether the Government has planned to privatise Vishakapatnam Steel Plant;
- (b) if so, the details thereof and the reasons therefor;
- (c) whether the Government is aware that the State Assembly of Andhra Pradesh and Greater Vishakapatnam Municipal Corporation have adopted resolution against the sale of the said steel plant; and
- (d) if so, the details thereof and the reasons for not caring the people's wishes and Assembly resolutions?

## ANSWER

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

(a) & (b): The Cabinet Committee of Economic Affairs (CCEA), in its meeting held on 27.01.2021,  have  accorded 'in-principle'  approval  for  100  %  disinvestment  of

Government  of  India  (GOI)  shareholding  in  Rashtriya  Ispat  Nigam  Limited (RINL)  (also  called  Visakhapatnam  Steel  Plant  or  Vizag  Steel)  alongwith RINL's stake in its Subsidiaries/Joint Ventures through strategic disinvestment by way of privatisation.

- (c) & (d): The  Government  is  aware  of  the  resolution  passed  by  the  Andhra  Pradesh Legislative Assembly (APLA) against the decision to divest GOI's shareholding  in  RINL.  However,  Government has taken the decision  earlier for  strategic disinvestment, as it will lead to infusion of capital for optimum utilization, expansion of capacity, infusion of technology and better management practices. This will result in higher production and productivity and  expansion  of direct  and  indirect  employment  opportunities.  While deciding  the  terms  and  conditions  of  strategic  sale,  legitimate  concerns  of existing  employees  &  other  stakeholders  are  suitably  addressed  through appropriate provisions made in the Share Purchase Agreement (SPA).

Further,  Government  has  brought  New  Public  Sector  Enterprise  (PSE) Policy for Atmanirbhar Bharat which has been notified on 4 th  February, 2021 and is applicable  to  Central  Public  Sector  Enterprises  (CPSEs),  Public  Sector Banks  (PSBs)  and  Public  Sector  Insurance  Companies  (PSICs).  As  per  this policy, existing Public Sector Enterprises (PSEs) have been broadly classified under Strategic and Non-strategic Sectors. It has also been laid down that in strategic  sectors,  only  a  bare  minimum  presence  of  the  existing  PSEs  at Holding  Company  level  will  be  retained  under  Government  control.  The remaining enterprises in strategic sector will be considered for privatisation or merger or subsidiarization with another CPSEs or for closure. PSEs in the nonstrategic sectors shall be considered for privatisation, where feasible, otherwise such enterprises shall be considered for closure. Steel manufacturing falls in the non-strategic sector.

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