The Steel Executives Federation of India (SEFI) has suggested the merger of Steel Public Sector Undertakings (PSUs) to increase efficiency and improve competitiveness in the global market. In an e-mail to the Prime Minister's Office, SEFI General Secretary Mr Bimal Bisi proposed that the government should merge all steel PSUs into one entity to create a larger and more robust organization.
The suggestion comes at a time when the Indian steel industry is facing significant challenges due to the global economic slowdown, rising competition from other nations, and the COVID-19 pandemic. A merger of steel PSUs would lead to greater economies of scale, which would reduce costs, improve production efficiency, and help the merged entity to compete more effectively with foreign competitors.
The SEFI has recommended that the merger should be undertaken in a phased manner, with the larger and more profitable PSUs being merged first. This would pave the way for a smooth consolidation process and ensure that the weaker units are protected. The merged entity would have a combined workforce of over 2 lakh employees, and a production capacity of around 30 million tonnes per annum.
Mr Bisi stated that the merger would lead to several benefits, including the elimination of the duplication of efforts, reduction in manpower, reduction in operating costs, and the development of synergies. It will also help the government to reduce its stakes in PSUs and pave the way for private investment in the sector.
The decision to merge steel PSUs is not a new one, and the government has been contemplating it for several years. However, the process has been slow, and there have been several challenges, including opposition from employee unions, concerns over job losses and compensation issues.
If the government decides to go ahead with the merger, it would need to address these challenges and ensure that all stakeholders are adequately compensated. It would also need to ensure that the merged entity is competitive and capable of responding to the challenges in the global market.
In conclusion, the merger of steel PSUs is a step in the right direction, and the SEFI's suggestion should be seriously considered. It will lead to significant benefits for the industry and help it to compete more effectively with other countries. The government should take proactive measures to address the challenges and ensure that the merger is implemented smoothly, without disrupting the lives of employees and other stakeholders.