HYDERABAD: The Telangana government’s plans to submit Expression of Interest (EoI) for a “stake” in the Rashtriya Ispat Nigam Limited (Visakhapatnam Steel Plant) has snowballed into a political controversy with the ruling YSR Congress (YSRC) in Andhra Pradesh questioning the rationale behind the move.
Its senior advisor Sajjala Ramakrishna Reddy hit the nail on the head, pointing out that the EoI was invited for infusion of only working capital. Andhra Pradesh Industries Minister Gudivada Amaranth, on the other hand, sought to know how could Telangana submit EoI in violation of Central government’s rules.
This came even as a five-member team — three directors and two general managers — from the Singareni Collieries Company Limited (SCCL) arrived in the Steel City to study the VSP’s viability.
They will be wrapping up their visit on Wednesday after talks with the VSP’s higher officials. “Our officials are touring VSP. Once they submit their report, the government may take a decision on EoI,” Telangana IT & Industries Minister KT Rama Rao said on Tuesday.
The point made by the YSRC-led AP government assumes pertinence. Because, the Department of Investment and Public Asset Management Disinvestment of the Union Ministry of Finance in a memorandum dated April 19, 2022 categorically stated that “Public Sector Enterprises (PSEs), State governments and Cooperative Societies controlled by the governments are not permitted to participate in the strategic disinvestment or privatisation of other PSUs (where 51 per cent or more ownership is by the Central or State governments) as bidders unless otherwise specifically approved by the Central government in public interest.”
It further said the issue of participation of PSEs (Central/State/joint), State governments and cooperative societies controlled by the governments as a bidder in strategic disinvestment/privatisation of PSEs has been examined in the light of the New Public Sector Enterprise Policy for Atmanirbhar Bharat issued in February 2021.
“In order to realise the mission of New, Self-Reliant India, the PSE policy intends to minimise the presence of government in PSEs across all sectors of the economy and to make available newer investment opportunities for the private sector, so as to allow infusion of private capital, technology, innovation and best management practices so that post-privatisation growth of PSEs may generate higher economic activities resulting in new job opportunities and growth of ancillary industries. Therefore, transfer of management control from the Union government to any other government organisation /State government may continue the inherent inefficiencies of PSEs and will defeat the very purpose of the new PSE policy”.
Given this, if the Telangana government wants to submit EoI for VSP, it should take prior approval from the Centre. It is not yet clear if the Telangana government has approached the Centre. The government, reports suggest, is exploring legal options to challenge the Centre’s memorandum in the Supreme Court. Since it has already made its intention to submit EoI, the KCR-led Telangana government will have to act before April 15, the last date for submission of intent.
Politically, the BRS and its chief K Chandrasekhar Rao are said to be of the view that it could put pressure on the Centre as VSP is a sensitive and emotive issue in Andhra Pradesh.