SAIL's Coal Overspend: Audit Exposes Inventory Mismanagement
The Comptroller and Auditor General (CAG) report reveals that Steel Authority of India Ltd (SAIL) overshot its coal import limits, incurring Rs 2,539.68 crore in extra expenses. The audit highlights inventory management issues, including unmaintained stock levels, increased non-moving inventory, and inefficient procurement processes between 2016-2023.
- Country:
- India
The recent Comptroller and Auditor General (CAG) report has brought to light significant mismanagement in inventory by the Steel Authority of India Ltd (SAIL). The report indicates SAIL's excessive consumption of imported coal across its plants from 2016 to 2023, which ran beyond the prescribed limits.
This excess usage resulted in a steep financial implicatiion, with extra expenditure amounting to Rs 2,539.68 crore. Furthermore, SAIL has failed to establish a benchmark for inventory carrying costs, leading to inefficiencies, as highlighted in the CAG's 'Inventory Management in SAIL' report.
The audit also points out other operational shortcomings, such as the inability to maintain stock levels of critical raw materials, leading to reduced production capabilities and potential revenue losses. Additionally, prolonged procurement processes and escalation of non-moving inventory have hampered SAIL's operational efficiency.
(With inputs from agencies.)
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