Half-hearted assistance to RINL, without addressing its basic problems on a permanent basis, will cripple it

Continued half-hearted assistance to RINL, without addressing its basic problems permanently, will cripple its operations, demoralise its employees and destroy its intrinsic worth. Not paying salaries to employees for work already done and not depositing PF and SBF contributions prima facie illegal

To
Shri Manoj Govil
Secretary (Expenditure)
Ministry of Finance
Government of India

Shri Sandeep Pondrik
Secretary (Steel)
Ministry of Steel
Government of India

Dear S/Shri Govil and Pondrik,

I invite your attention to my recent letter of 3rd February 2025 addressed to the Union Steel Minister and my earlier letter of 18th January, 2025 addressed to the Union Minister for Finance , in which I suggested a package of measures to revive RINL.

Evidently, neither the Ministry of Finance nor the Steel Ministry is interested in maintaining the morale of RINL’s employees, nor do they have any sincere determination to revive RINL on a permanent basis.  

For example, as against a financial assistance package of Rs 11,440 crores announced by the government, I find that the latest budgetary provision for RINL is only Rs 2,995 Crores, indicating reluctance on the part of the government to recognise the ground realities and come to grips with the challenge of reviving RINL on a long-term basis.

At the cost of repetition, let me point out that RINL’s financial problems are squarely attributable to the way DIPAM, the Steel, the Mines and the Finance Ministries have collectively mismanaged its affairs over the years. Had the Mines Ministry, which has displayed over-exuberance in doling out multiple iron ore blocks to private mining companies, has consistently denied that favour to RINL, thus deliberately escalating its steel production cost, which suggests a well-orchestrated attempt to render RINL’s operations non-competitive vis-a-vis its private competitors. An independent enquiry will reveal the extent of mismanagement that has led to RINL becoming a loss-making unit.

Apparently, neither the Steel Ministry nor the Finance Ministry had the intention of placing all the facts before the Union Cabinet, when the latter took a decision recently to sanction Rs11,440 Crores assistance, as RINL’s overdue debt in itself exceeded Rs 30,000 Crores. It looked as though the concerned Ministries were collectively determined to see RINL to continue “bleeding”, so as to pave the way for handing over its ownership for a pittance to a favoured private promoter.

After all this, it is bizarre that the Steel Ministry should hold RINL’s employees responsible for all its ills and subject them to victimisation!

I understand that, as on date, RINL’s management is yet to release Rs 227 Crores of salary dues to its employees. Not paying their full salaries not only subjects them to continuing demoralisation but it also amounts to an outright offence, as it implies a breach of the legal obligation on the part of RINL’s management to compensate them fully for work already done.

It appears that RINL’s management is yet to deposit amounts recovered from employees into their Provident Fund and Superannuation Benefit Fund accounts, to the extent of around Rs 600 Crores. In addition to possible infringement of the relevant laws, this also amounts to a breach of trust on the part of RINL’s management.

Evidently, the employee-related dues to be settled amoint to around Rs 900 crores as on date.How can the Steel Ministry uphold the spirit of Para 4.15.4 of its own National Steel Policy (2017), which requires it to groom RINL into a leadership role in the steel sector, when it is a party to the deliberate attempt on the part of the government to weaken it and demoralise its employees?

May I call upon you both to ensure that, as an immediate measure of relief, settle all outstanding dues to RINL’s employees, so as to maintain their morale?

As I indicated in my appeal to the Union Steel Minister, the following steps need to be taken to revive RINL fully, on a long-term basis:

1. Unless RINL has access to its own source of an operational iron ore of good quality at a convenient location and unless its raw material cost comes down with immediate effect, it cannot compete in the market and sustain its operations in a viable manner. Any revival plan that ignores that aspect is meaningless. 
2. The first and foremost priority should be accorded to paying the employees their salaries and settling their overdues, to maintain their morale
3. The revival plan should be such that, by implementing it, RINL would be free from outstanding debt and all other liabilities (vendors’ dues, payables to contractors etc.) This is within the domain of possibility, considering that the Union Finance Ministry did not bat an eyelid even once in doling out Rs 13,000 crores of PLI subsidy to a profit-earning US company, Micron for setting up a semiconductor plant in Gujarat
4. The revival plan should be consistent with Para 4.15.4 of its own National Steel Policy (2017), which enables RINL to play its expected lead role in the steel industry
5. If the Steel Ministry fails to make available an operational iron ore immediately to RINL, and clear all its dues, the only ready option available to revive RINL is to merge it with SAIL. In fact, during the seventies, at the time of its inception, RINL started its operations as a part of SAIL.
6. Permanent revival of RINL as a vibrant CPSE should be viewed as an issue revolving around the sentiments of the people of this region. This is an issue on which the Centre has dragged its feet for too long, which the people of this region will be reluctant to condone. The Centre should respect  the people’s sentiment, as it was forced to do in the late sixties, when the then government had to yield to all round public sentiment in north Andhra region.

I hope that the Steel and the Finance Ministries jointly address these measures in a holistic manner and help RINL to stand on its feet once for all.

I am making this appeal as a concerned citizen of north Andhra region, for the development of which RINL’s revival as a vibrant CPSE is of paramount importance.

Regards,

Yours sincerely,

E A S Sarma

Former Secretary to the Government of India