Ministry Asks Sail To Rework Vrs Terms
The Steel Authority of India (SAIL) has been asked to revise the terms and conditions of its on-going voluntary retirement scheme by the steel ministry following government decision to hike the retirement age for employees of public sector undertakings to 60 years.
The ministry has asked SAIL to submit the revised terms as soon as possible in order to maintain the viability of the scheme.
The scheme, which envisages the untimely retirement of nearly 75,000 employees, is part of the overall strategy adopted by the company to rationalise its costs. It offers full salary to employees over 55 years and 75 per cent to those over 45 years from the time they opt for VRS till they would have reached the age of superannuation, which before the hike was 58 years.
Sources say that with the increase in the retirement age limit, the scheme can also be revised upwards by 2 years both from the time that an employee could opt for the voluntary retirement as also from the age of superannuation. Thus, the 55 and 45 year limit can be revised to 57 and 47, respectively.
When contacted by Business Standard, a SAIL spokesperson said: "It is true we are re-assessing the scheme in view of the new norms. We expect to submit our revised scheme to the SAIL board within 10 days."
While there was little change in SAIL's production when compared to the previous year, the company had improved its sales turnover by 7 per cent. However, input costs increased by almost Rs 1700 crore. In this connection, the ministry has also asked SAIL to plan an in-house cost reduction scheme, cutting down on raw material consumption, specially of coal.
SAIL is also said to be considering other measures, including an overall decrease in its advertising budget besides reducing benefits accruing to the employees.
SAIL is also planning to tap new overseas markets as also improve its domestic network by penetrating rural markets.
An internal committee, set up by SAIL to work out ways and means of trimming costs, had identified those mills and products in Rourkela and Durgapur which could be discontinued. The move to identify mills which could be closed, followed SAIL's Rs 10,000-crore modernisation programme at Rourkela and Durgapur, which would convert these units into 100 per cent continuous casting plants.