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JPC contests reforms panel report

Ishita Ayan Dutt

The Joint Plant Committee has contested the Geethakrishnan Committee's recommendation saying that it is not a constituent of the steel ministry.

In a detailed note to the ministry, the JPC has pointed out that in various documents, including the annual report submitted in Parliament every year by the ministry, the organisation of JPC has never been mentioned as a constituent of the steel ministry.

Further, the Union government, while responding to the allegations levelled by the Department of Commerce of the US government, had declared that JPC is an independent authority controlling the steel development fund.

The Expenditure Reforms Committee under the chairmanship of Geethakrishnan, former secretary (finance), had recommended downsizing of different government departments, including steel. The report recommended winding up of the JPC. At present, the total staff strength of the JPC is 265.

JPC was constituted in 1964 as an autonomous committee drawing powers from clause 17B of the Iron & Steel (Control) Order, 1956. JPC officials said it is an independent body set up by the Union government and has the power to discharge its own functions.

According to JPC officials, the organisation has never received any budgetary support from the ministry of steel. "The main source of funds for JPC is the JPC Cess Fund, which was built up with contributions from the consumers."

JPC is mainly a body of the producers, with the development commissioner for Iron & Steel as chairman, and six members from the steel producers and the Railways. The latter is represented as a significant consumer.

At present, the JPC Cess Fund approximately comes to Rs 2.50 billion. "Our expenditure is around Rs 70 million, funded from returns on investment of Rs 250 million. JPC has never been supported through budgetary resources of the Union government" JPC officials added.

"Where fierce competition exists for marketing of their products, and some even resorting to undercutting, it is not possible for the producers to unite for a common cause like market development, technology development and other issues. This has been clearly established through formation of organisations, such as Indofar, which was later disbanded," the officials added.

The Geethakrishnan Committee report says the main functions hitherto carried out by JPC have ceased to exit after the decontrol of the steel industry in 1992, and needs to be wound up. "A maximum of three months could be provided for completing the winding up process in an orderly manner"it says.

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