SAIL’s Massive Inventory: CAG Flags Lack of Cost Control
The Comptroller and Auditor General (CAG) has raised serious concerns over Steel Authority of India Limited’s (SAIL) management of its substantial inventory. The audit revealed that SAIL lacked any established benchmark for calculating the carrying cost per tonne of raw materials, semi-finished, and finished goods.
This oversight is particularly significant considering SAIL maintained an average inventory valued at ₹21,698 crore between 2016-17 and 2022-23. This represents a staggering 67 per cent of the company’s current assets.
The absence of a defined cost benchmark hinders effective inventory management and potentially impacts SAIL’s profitability. The CAG’s findings highlight a critical gap in the company’s financial controls.
This lapse in inventory management practices raises concerns about potential financial losses and operational inefficiencies at SAIL. The government and SAIL’s management will need to address these issues to ensure the company’s long-term financial health and competitiveness in the global steel market. The implications for taxpayers and the nation’s steel sector are considerable.
