**Executive Summary**
This document is an answer to Unstarred Question No. 476 in Lok Sabha regarding concerns about the Salem Steel Plant. The question addresses disinvestment, expansion, inclusion in joint ventures, incentives under the Production Linked Incentive (PLI) Scheme, and equitable regional distribution of steel sector investments. The answer acknowledges the annulment of the Expression of Interest (Eol) for strategic disinvestment due to lack of interest.
**Key Points / Main Content**
* **Strategic Disinvestment:**
* The existing Expression of Interest (Eol) for Strategic Disinvestment of Salem Steel Plant (SSP) issued on 04.07.2019 has been annulled due to a lack of interest from shortlisted bidders.
* **Empowerment of Public Sector Enterprises (PSEs):**
* Boards of parent Public Sector Enterprises (PSEs) are empowered to undertake transactions for strategic disinvestment of their units, provided 'in-principle' approval has been accorded by the Cabinet Committee of Economic Affairs (CCEA).
* **Operational Improvements by SAIL:**
* Steel Authority of India Limited (SAIL) has taken steps to enhance the profitability of Salem Steel Plant by undertaking operational improvements in the areas of power, fuel, manpower, metal recovery, and yield.
* **Government Role in Steel Sector:**
* Steel is a de-regulated sector.
* The role of the government is to facilitate the steel industry by creating a conducive policy environment for the development of the steel sector, including in Tamil Nadu.
* Incentives under the Production Linked Incentive (PLI) Scheme for Specialty Steel are uniformly applicable across the country.
**Impact Analysis**
**Salem Steel Plant:**
* **Impact:** The strategic disinvestment process, as initially planned, has been stalled. However, SAIL is working to improve the plant's profitability.
* **Action Required:** Continue operational improvements to enhance profitability.
**Shortlisted Bidders:**
* **Impact:** Any activities, costs, or efforts related to the Eol are now obsolete.
* **Action Required:** No further action required as the Eol has been annulled.
**Tamil Nadu:**
* **Impact:** Inclusion in joint ventures or expansion proposals is dependent on the plant's operational improvements. Incentives are available via the PLI Scheme.
* **Action Required:** To benefit from the government's supportive role in the steel sector, Tamil Nadu must continue to participate within the broader national framework.
**Steel Authority of India Limited (SAIL):**
* **Impact:** Responsible for enhancing the profitability of Salem Steel Plant through operational improvements.
* **Action Required:** Continue to implement and monitor the operational improvements in areas such as power, fuel, manpower, metal recovery, and yield.
Key Entities Referenced
Salem Steel Plant: The steel plant that is the subject of concerns regarding disinvestment and expansion.
Production Linked Incentive (PLI) Scheme for Specialty Steel: A scheme providing incentives to specialty steel manufacturers.
Department of Investment and Public Asset Management (DIPAM): The department involved in the disinvestment of Public Sector Enterprises.
Cabinet Committee of Economic Affairs (CCEA): The committee that accorded 'in-principle' approval for strategic disinvestment of units.
Tamil Nadu: State relevant to joint venture proposals for Salem Steel Plant.
GOVERNMENT OF INDIA
MINISTRY OF STEEL
LOK SABHA
UNSTARRED QUESTION NO. 476
FOR ANSWER ON 03.02.2026
CONCERNS REGARDING SALEM STEEL PLANT
476. DR. T SUMATHY ALIAS THAMIZHAC HI THANGAPANDIAN:
Will the Minister of STEEL be pleased to state:
(a) whether the Government has considered the concerns regarding possible
disinvestment or stagnation of the Salem Steel Plant, which supports over 2,000 direct
jobs;
(b) whether any expansion or modernisation funds have been allocated to the Salem
Steel Plant in recent years;
(c) the reasons for Tamil Nadu not being included in joint venture or expansion
proposals, including the JSW–SAIL collaboration, despite the State’s production
potential;
(d) whether incentives under the Production Linked Incentive (PLI) Scheme for
Speciality Steel have been extended to units in Tamil Nadu; and
(e) the steps taken to ensure equitable regional distribution of steel sector
investments?
ANSWER
THE MINISTER OF STATE IN THE (SHRI BHUPATHIRAJU SRINIVASA VARMA)
MINISTRY OF STEEL
(a)&(b): Based on recommendations of the Core Group of Secretaries on
Disinvestment (CGD), in respect of the strategic disinvestment of Salem Steel Plant
(SSP), Salem; the Alternative Mechanism (AM) approved that the existing Expression
of Interest (EoI) issued for Strategic Disinvestment of Salem Steel Plant (SSP), Salem
on 04.07.2019 be annulled due to lack of interest of shortlisted bidders.
Department of Investment and Public Asset Management (DIPAM), on
01.06.2022, conveyed Cabinet's decision of 18.05.2022, empowering Boards of
parent Public Sector Enterprises (PSEs) to undertake transactions for strategic
disinvestment of their units, where 'in-principle' approval has been accorded by the
Cabinet Committee of Economic Affairs (CCEA).
Steel Authority of India Limited (SAIL) has taken steps to enhance profitability
of Salem Steel Plant by undertaking operational improvements in the areas of power,
fuel, manpower, metal recovery, and yield.
(c)to(e): Steel is a de-regulated sector and the role of the Government is to facilitate
the Steel Industry by creating a conducive policy environment for the development of
steel sector in the country including Tamil Nadu. Incentives under the Production
Linked Incentive (PLI) Scheme for Specialty Steel are applicable uniformly across the
country.
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