‘Privatising Vizag steel plant? We want our land back’: Farmers to Centre

In 60s and 70s, about 16,600 farmers gave up 22,000 acres of land for the Visakhapatnam Steel Plant with a hope of getting government jobs and compensation for their lands

SAIL, extended deadline, disinvestment, 3 steel producing units, The Federal, English news website
The Vizag plant is India’s first shore-based steel plant set up in 1971. As per the Budget 2021-22, asset sales will be key to bridging the government’s yawning budget gap, which will widen to 9.5 per cent of the GDP this year | Representational image: iStock.

Farmers, who gave up their cultivable lands for the sake of building a public sector steel plant with the hope of a better future for their next generations, are now up in arms against the Union Government’s decision to privatise the 7.3 million ton capacity Rashtriya Ispat Nigam Limited – Visakhapatnam steel plant (RINL – VSP) in Visakhapatnam (Andhra Pradesh).

The Centre has proposed to divest 100% of its share in the ‘Navratna’ plant to private parties, with 50% divested in favour of a foreign company.

Feeling betrayed, the land donors are now demanding their lands back. “Run VSP in public sector or return our lands” slogan is gaining momentum and is getting the support from intellectuals as well. Former economic secretary EAS Sarma, for instance, endorsed their demand terming it “fully justified when the Centre resorts to violation of trust”.

EAS Sarma told The Federal: “Visakhapatnam Steel Plant was set up half a century ago as a PSU, as a result of a massive people’s movement. More than 20,000 acres of land was forcibly acquired from farmers in the name of public purpose. The market value of the land now stands in excess of Rs 1,50,000 crore.”


During the mid 60s and early 70s, about 16,600 farmers had to part with close to 22,000 acres of land for the Visakhapatnam Steel Plant, a Government of India enterprise. Then district collector Arjun Rao approached the farmers asking them to give lands (1, 000 acres to start with) in lieu of jobs for their kin and economic prosperity of the area.

The government issued R – Cards (Rehabilitation Cards) to each family. An R-Card entitles the family to monetary compensation and a job in the plant, which is suitable to their qualification. The administration established ITIs and encouraged the youths to undergo vocational training to be eligible for jobs in the steel plant.

Surprisingly, an estimated 50 percent of the land donors have yet to get a job, while some are still struggling to get compensation against the land given. “My in-laws won cases twice in the high court and twice in the Supreme Court for compensation against the land they gave 50 years ago. But, even today, we have not received the money that rightly belongs to us. The district administration and the plant management keep passing the buck on each other,” said B Hanumantha Rao, a retired PSU official. “We are asking the government to return our lands”, he added.

Farmers have been in discussion about joining protests organised by VSP trade unions. “We are raising our voice through these platforms, while we are trying to bring together all the families that gave the lands for the plant,” said another farmer.

When the earlier governments doled out more than 2,000 acres out of this land to a private port at a nominal price, there was intense public opposition.

“Farmers believed the government and gave their lands for starting a steel plant. The response may have been different, if the plant was proposed in the private sector,” said M Yugandhar Reddy, a political analyst from the port city.

Centre of Indian Trade Unions (CITU) general secretary J Ayodhyaram said, “Farmers are upset with the government’s disinvestment decision. They are joining our protests. About 20 percent of those few who got jobs are on a contract basis.”

Sarma accused the Centre of systematically letting down this PSU by not allotting a captive iron ore mine and adversely affecting its finances by allowing steel imports on a large scale, despite its being recognised as a “Navaratna” company.

Also read: PSUs in Karnataka in a shambles due to mounting losses, other lapses: CAG

Sarma termed it as a “unilateral decision not based on any consultation with the State government nor with the people nor the workers”. There was no discussion in Parliament either. “If the Centre still goes ahead with privatising the steel plant, it would constitute a violation of the trust on which the local farmers had parted with their lands. They will be fully justified in demanding that their lands be returned to them, as the so-called public purpose would no longer be served,” he added.

CM YS Jagan’s ‘unused land disposal’ formula to clear debts

Under pressure from all quarters to save the plant from privatisation, chief minister YS Jagan Mohan Reddy wrote to the Prime Minister, with variety of proposals including takeover of the plant by the state government. Addressing the trade unions in Vizag earlier this week, he mooted the idea of developing and selling the 7,000 acres of unused land to raise funds and clear the debts.

The Telugu Desam Party (TDP) suspect the influence of a big real estate lobby behind the privatization plan. The party accused CM Jagan Reddy of trying to establish executive capital in Vizag.

Also read: Centre’s disinvestment agenda bold, but not too rosy

“It is unbecoming of a CM to moot the idea of selling assets of PSU to clear debts. Is selling assets the solution? If allowed, he will sell Andhra Pradesh one day,” TDP supremo Chandrababu Naidu said.

Government advisor S Ramakrishna Reddy retorted, “Tell us if you have a better plan, rather than ridiculing the CM.”