Visakhapatnam Steel Plant struggles to pay executive salaries, sparking protests

Visakhapatnam Steel Plant struggles to pay executive salaries, leading to protests.

Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), for the first time in its 42-year-old history, has found it difficult to pay salaries to its Executive cadre employees for the month of February, 2024, in March, as on date (March 9). An amount of ₹42 crore is required to pay their salaries.

The executive cadre has started wearing black badges as part of a formal protest against the delay in payment of salaries, and hoped that salaries will be paid in the coming week starting from Monday (March 11). “We used to wear black badges for many other reasons, but never for salaries. For the first time, the plant’s executive cadre started wearing them from Friday (March 8),” said a leader of the Visakha Steel Executives Association (VSEA).

RINL was formed on 18 February 1982 when the VSP was demerged from Steel Authority of India Limited (SAIL). Currently, the steel plant has 13,557 regular employees, including 9,154 non-executive cadre employees and 4,403 executive cadre employees.

RINL-VSP requires at least ₹80 to ₹85 crore per month to pay only net salary (the amount to be credited into bank account after deductions) to both executive and non-executive employees. About 50% of this amount is meant for executive. Although the number of employees in executive cadre (4,403) is less compared to non-executives (9,154), their salaries are higher.

“RINL has already paid salaries of non-executive cadre in the first week of March. If they are not paid, the production suffers as the non-executive cadre is almost all related to the production side. The officials coming under the administration department are executive cadre. The company earned good amount from the sales in February. However, the amount meant for salaries of executive cadre is said to have been diverted towards payment of GST. As it is the month of March, ending of financial year, if GST is not paid, the product will not go on sale and this will have an impact on the auditing of entire fiscal. Our plant does not have ₹42 crore for salaries despite earning more than ₹2,000 crore from the sales in February,” said a VSEA leader.

According to reliable sources from RINL, during 2023-24 (from April 1, 2023 to March 9, 2024), total steel sales were 39,81,690 tonnes. Its value is ₹22,000 crore. In February 2024 itself, the total sales volume was 4,14,516 tonnes valued at ₹2,161 crore.

Speaking to The Hindu on Saturday (March 9), a senior VSP official said, “Yes, there is a problem of delayed salaries for all the executive cadre in the plant. It will be resolved soon.“