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Critical Topics and Their Significance for the UPSC CSE Examination on October 10, 2024

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On protests against Vizag steel plant sale

For Preliminary Examination:  Current events of national and international importance

For Mains Examination: GS II - Polity & Governance

Context:

Ever since Finance Minister Nirmala Sitharaman announced the 100% strategic sale of the Rashtriya Ispat Nigam Limited (RINL), the corporate entity of the Visakhapatnam Steel Plant (VSP), in January 2021, employees of the plant affiliated to various unions such as AITUC, CITU and INTUC, have protested against the move and stalled all plans of takeover by any private company. The VSP is the only shore-based steel making public sector unit (PSU) in the country.

Read about:

Rashtriya Ispat Nigam Limited (RINL)

What is public sector unit (PSU)?

Key takeaways:

Since Finance Minister Nirmala Sitharaman's announcement in January 2021 about the 100% strategic sale of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of the Visakhapatnam Steel Plant (VSP), plant employees affiliated with unions such as AITUC, CITU, and INTUC have been protesting and halting any takeover attempts by private companies. VSP is the only public sector steel-making unit located by the shore in India.

Current Status of the Plant:

Due to the ongoing protests, neither the Legal Committee nor the Assessment Committee has been able to access the plant, delaying the government’s efforts to issue an Expression of Interest for the sale. As a result, the sale plans have been postponed, and the Union Government has withdrawn its support for the plant.

In the last three years, the plant has faced significant financial losses, and production has dropped sharply, with only one out of three blast furnaces operational. Employee benefits have been reduced, and salaries are delayed by 20 to 30 days each month. The plant is also so financially strained that it cannot even procure imported coking coal for its coke oven from nearby ports. The plant currently employs around 12,600 permanent staff and 14,000 casual workers.

Why is VSP Considered a Legacy Plant?

• VSP has a strong emotional connection with the people of Andhra Pradesh. The struggle for its establishment began in 1963 when Chidambaram Subramaniam, a senior Congress leader, announced plans for a shore-based steel plant in Visakhapatnam.
• On July 1, 1966, the State Assembly, led by Chief Minister Kasu Brahmananda Reddy, passed a unanimous resolution in favor of the plant.
• However, the project saw no progress until Amrutha Rao, a leader from Guntur, started a fast unto death at the Visakhapatnam District Collector’s office in October 1966. This act intensified protests, with students across Andhra Pradesh joining the cause, resulting in state-wide strikes and the tragic loss of 32 lives in November.
• The slogan "Visakha Ukku Andhrula Hakku" (Visakha Steel: The Right of the People of Andhra) resonated across the country, pressuring the Congress-led central government. On April 10, 1967, Indira Gandhi announced in Parliament the decision to establish a steel plant in Visakhapatnam. Land was acquired from 68 villages, and the plant’s first blast furnace was inaugurated on March 20, 1990.

Why Did the Centre Decide to Sell?

• VSP possesses a large land bank of approximately 20,000 acres, valued at around ₹1 lakh crore, which employees claim has drawn interest from private entities for its real estate potential.
• The plant is technologically advanced and has the capacity to expand to 20 million tonnes. It produces high-quality steel and has a strong