Call to Halt Alleged Privatization of Vizag Steel Plant

Fast Summary

• The Union Steel Ministry reportedly plans to outsource over 32 segments of Visakhapatnam steel Plant (VSP) operations to private companies.
• Former Secretary to the Government of India, E.A.S. Sarma, voiced strong opposition through a letter addressed to Union Minister for Steel H.D. Kumaraswamy on August 18, citing concerns about VSP’s public-sector status being undermined.
• Sarma accused both the Center and state NDA government of calculated steps aimed at eroding VSP’s Central Public Sector Enterprise (CPSE) identity, including denial of captive iron ore mines and irregular supply of key inputs like coking coal.
• He highlighted alleged preferential treatment given to private firms like ArcelorMittal, which received land at subsidized rates and additional concessions such as captive port facilities and tax benefits surpassing ₹11,440 crore financial support afforded by the Centre to VSP.
• Expressed concern that piecemeal privatisation could undervalue VSP assets like land and machinery while reducing employment opportunities for local youth in north Andhra and limiting SC/ST/OBC reservations in job allocations-a important socio-economic issue within the region.
• sarma called upon the Union Minister for action supporting employees and safeguarding local interests.

Indian Opinion Analysis

The reported move toward outsourcing operations at Visakhapatnam Steel Plant raises critical questions about India’s evolving approach toward public-sector enterprises amid increasing privatisation trends. while proponents argue outsourcing can enhance productivity through private sector efficiency,former official E.A.S. Sarma’s critique underscores risks such as undervaluation of government assets or diminished access for entities relying on affirmative-action policies like SC/ST/OBC reservations.

For regions like north Andhra reliant on VSP-based employment stability, potential socio-economic disruptions warrant careful deliberation before proceeding with partial or full privatisation efforts.Policymakers may need to address concerns raised on resource allocation equity-such as mineral rights-and ensure openness around concessions granted selectively between public versus private players in strategic sectors.

Read More: Published – August 18, 2025