SAIL earlier introduced VRS schemes in 1998, 1999 and 2001 and achieved success. It successfully separated around 6000 employees through the first VRS which was in operation from March 01 to August 31, 1998. More than 13,000 employees availed of VRS-99. Under VRS-2001 more than 6500 employees were separated. It has set a target of 10,000 for VRS-2002.

    The new VR scheme is on similar line as VRS-2001. Those employees who have completed a minimum of 10 years of service or above 40 years of age will qualify for VRS-2002. Based on the Department of Public Enterprise’s VR scheme that exist in the state of Gujarat, the compensation package includes a salary of 35 days for every completed year of service and 25 days for the balance of service left until superannuation.

    To improve its competitiveness, SAIL’s manpower will be brought down to a level of around one lakh by 2005 through natural as well as voluntary separations. The Government had agreed to provide guarantees with 50 per cent interest subsidy for loan on Rs.1500 crore which SAIL can raise from the market to finance its VR schemes. SAIL has planned to raise Rs.500 crore from the market, to fund VRS-2002. Payment will be on a one-time lump sum cash basis. The new VRS, which will be open to all regular, permanent employees of SAIL, will be in operation till May 15, 2002.