Loss-making SAIL under Par panel scanner
New Delhi, June 6: Loss-making public sector undertaking Steel Authority of India (SAIL) has been asked to improve its financial performance by Parliamentary Standing Committee after its net profit declined from Rs 6,817 crore in 2004-05 to Rs 3,528 crore in 2005-06.
The committee, in its latest report, has noted although steel production in SAIL's units has been increasing since 2004-05, its net profit had declined by half.
SAIL's net profit is likely to dip further to Rs 3,106 crore in the current fiscal.
It was therefore advised to improve its corporate plan to suit the organisation's long-term needs. The committee members were of the view that measures taken by the SAIL could not arrest the decline in profits in the current fiscal year.
The committee noted the steel PSU planned to increase its profit by focusing on market strategies, improvement in product mix, use of alternative fuels in blast furnaces, acquisition of overseas coking coal mines and manpower rationalisation, a Ministry spokesman here said.
It further noted that 2004-05 was an exceptional year for the steel industry with demand outstripping supply, resulting in higher realisation for steel products. But in 2005-06, the demand for steel products turned sluggish causing lower realisation.
In its report on the Demands for Grants 2005-06, the Parliamentary panel had cautioned SAIL that increasing input costs coupled with the cyclic nature of the steel industry would put tremendous pressure on the PSU to improve its performance.