Hornet’s nest. Vizag Steel Plant divestment: For Telangana, political gains may outweigh economic implications

Telangana government’s plan to participate in the Expression of Interests (EoI) for the Vizag Steel Plant when its divestment process begins has stirred up a hornet’s nest raising many questions on the sagacity of the proposal and its implications.

The State Government, according to Minister for Industries K T Rama Rao, has already deputed a team of officials to study the feasibility and modalities of participating in the EoI which is yet to be invited by the Department of Investment and Public Asset Management (DIPAM).

“A decision on whether to participate in the bidding or not would be taken later. Right now the matter is being examined,’‘ Rao said. 

Whatever may be the final decision of the State Government, it kicked off a political and economic debate in the two States and elicited interest in national politics too. The State Government appears to be of the view that the political advantages of the proposal to participate in the bidding outweigh the economic aspects.

‘Bleak prospects’

The Bharat Rastra Samithi (BRS), which has an ambitious national political agenda in the ensuing assembly polls later this year and parliament elections next year, made a political statement opposing the divestment policy of the NDA-led Government at the Centre. It also made BRS popular in Andhra Pradesh where it sees `bleak’ political prospects in view of the legacy of bifurcation, according to political analysts.  

Moreover, it pushed the ruling YSRCP-Government to a corner as it began defending itself explaining why it was not opposing the Vizag Steel privatisation plan as Andhra Pradesh Industries Minister G Amarnath responded by saying it was not clear if the States could participate in the process. “When the Centre itself is unable to run the plant due to financial burden, how can a state government could take it up?,’‘ the AP minister quipped. 

It may be too early to debate the economic implications for the Telangana Government as it is only considering participating in the EoI and a decision would only be taken after submission of its report by the offficial steam deputed to Visakahpatnam to study the feasibility. The political advantages of the issue outweigh its economic implications and the BRS may have the last laugh even if the proposal is dropped later.

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