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AP has no stake in VSP, will go ahead with privatisation: Finance Minister

Finance Minister Nirmala Sitharaman expressed the government's resolve to privatise Rashtriya Ispat Nigam Limited (RINL) despite opposition from the Andhra Pradesh government and workers’ unions of the steel plant. This means that the Centre will go ahead with privatisation, not paying heed to the public opposition to its move.
 
“Strategic disinvestment of Government of India’s equity will lead to infusion of capital for optimum utilisation, 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,” Sitharaman said in a written reply to a question in the Lok Sabha on the proposed privatization of RINL which owns the Visakhapatnam Steel Plant (VSP).
 
On the question of whether the centre has considered ramifications of the step on the stakeholders involved including impact on jobs of employees, Sitharaman said while deciding the terms and conditions of the strategic sale, legitimate concerns of the existing employees and other stakeholders are suitably addressed through appropriate provisions made in the Share Purchase Agreement (SPA).
 
On whether the Government intends to provide support to Andhra Pradesh for the due revival of the said project, Sitharaman said the state government does not have any equity in RINL. “However, the State Government is consulted in specific matters as and when needed and their support is also solicited in the matters that require their intervention,” she added.
 
The Cabinet Committee of Economic Affairs (CCEA) on 27th January, 2021 approved 100 % disinvestment of government shareholding in RINL also known as Visakhapatnam Steel Plant (VSP) or Vizag Steel along with RINL’s stake in its subsidiaries and joint ventures through strategic disinvestment by way of privatisation.
 
Andhra Pradesh observed a state-wide bandh last weekend in response to a call by VSP workers unions which was supported by the YSRCP-led state government. Most political parties in the state except Bharatiya Janata Party supported the bandh.
 
Government has set an ambitious disinvestment target of ₹1.75 trillion for FY22 after failing to complete any big-ticket privatization in FY21 due to the disruptions caused by the covid pandemic. For FY21, it has pared down its target to ₹32,000 crore from ₹2.1 trillion estimated in the Budget.
 
However, it is sad that the Centre wants to move ahead with privatisation at a time when the government’s revenue generating sources are depleting. Additionally, this is also a huge loss to the people of Andhra Pradesh as private players will be taking over the plant. There is already a huge opposition to the state’s major ports being taken over by private players like Adani. 
 
With this move, it is clear that the Centre is not only hurting the sentiments of Andhra people but also allowing the state to be destroyed economically!

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