The Central Government is set to announce a second financial package to further strengthen the Visakhapatnam Steel Plant (VSP), which has been stabilizing after a period of severe financial crisis. Following the initial assistance of ₹11,440 crore provided last year, the Union Steel Ministry is now preparing to extend an additional ₹8,097 crore in financial aid. Union Steel Minister H.D. Kumaraswamy has already cleared the file regarding this package, which has been sent to the Finance Ministry for formal approval before being presented to the Union Cabinet.
Similar to the first phase of assistance, the Centre has decided to provide this ₹8,097 crore in the form of equity. This strategic move ensures that the plant’s capital increases without adding to its existing debt burden. The first phase of funding, which was secured following consultations with the current coalition government in Andhra Pradesh, included ₹10,300 crore as equity and ₹1,140 crore as working capital loans. These funds have been instrumental in revitalizing the plant’s operations.
Currently, operations at the Vizag Steel Plant are gaining momentum with all three blast furnaces becoming operational. Steel production and sales have seen significant growth recently. Recognizing that additional funds are essential to sustain this progress long-term, the Centre aims to use this second phase package to guide the plant toward consistent profitability and long-term industrial stability.
