Sail Plans Fresh Round Of Vrs

The Steel Authority of India Ltd (SAIL), after laying off 6,510 employees in the third round of voluntary retirement scheme, is planning another round of VRS in early 2002.

SAIL sources said a lumpsum cash payment would be made like in the previous case and the target is likely to be around Rs 10,000.

The first and second rounds of VRS saw 5,975 and 13,617 employees opt for the scheme, respectively. While the first round was in 1998, the second was in 1999. Employees were offered deferred payment of salaries till age of superannuation.

In the third round, however, the employees were offered lumpsum cash payment and was financed with bank loans of Rs. 500 crore and as such the number of people who could be released depended on the funds available for the purpose.

The third round of SAIL VRS opened on 16th February and closed on 15th September. Among those released, 1,189 were executives and 5,321 were non-executives. Taking all the three VRS rounds together the number of employees laid off were: Bhilai Steel Plant - 5,822, Rourkela Steel Plant - 5,051, Durgapur Steel Plant - 4,699 and Bokaro Steel Plant - 3,679.

SAIL has reduced its manpower from 201, 415 in 1988 to 1,56,719 on March 31, 2001. It has plans to reduce its manpower to around 1,00,000 in the next 3-4 years as part of its financial restructuring exercise.

It maybe mentioned, over the past decade employees' remuneration and benefits have trebled from Rs. 1,000 crore in 1990-91 to Rs. 3,100 crore in 2000-2001. During the period, remuneration and benefits as a percentage of turnover shot up from 11.6 per cent to 19.1 per cent. The average payment per employee has increased from Rs. 52,000 to Rs. 1,98,000 during the past decade.

Sources said the reduction in manpower envisaged would bring down the manpower cost substantially. Furthermore, the first two rounds of VRS offered deferred salaries to employees.

"Such payments are still being made to a large number of employees who had opted for VRS. As these numbers go down, the expenditure on manpower would also go down," sources said.