Adverse market
conditions, surplus capacity in the domestic and international
market, subdued economic activities, fall in domestic and global
prices of steel, social costs, increase in input prices and
high manpower cost have contributed to the fall in the net worth
of the Steel Authority of India Limited (SAIL). Other major
factors are: increase in provisions for deferred revenue expenditure
on account of VRS, gratuity, leave encashment and settlement
benefits in compliance with accounting standards. As a result,
the net worth of the company at present is Rs. 2252 crore as
against Rs. 8000 crore in 1997.
SAIL has taken
a number of steps to improve its net worth. Those are: business
restructuring envisaging divestment of non-crore assets, intensive
cost control, control on capital expenditure, market oriented
product-mix, reinforcing sales and marketing efforts, greater
focus on customer satisfaction, rightsizing of manpower and
reduction in borrowings.
This information
was given by the Minister for Steel, Shri Braja Kishore Tripathy
in a written reply in the Rajya Sabha today.
