CAG Flags Major Lapses in Inventory Management at SAIL: ₹4,000+ Crore in Potential Losses
Overview of the CAG Audit on SAIL The Comptroller and Auditor General (CAG) of India tabled a performance audit report in Parliament highlighting significant lapses in inventory management at the Steel Authority of India Limited (SAIL) between FY 2016-17 and 2022-23. The audit reveals systemic inefficiencies, excess procurement, misuse of resources, and potential losses running into thousands of crores. No Benchmark for Inventory Carrying Cost Despite holding average inventory worth ₹21,698 crore—nearly 67% of its current assets—SAIL failed to fix benchmarks for inventory carrying costs across raw materials, semi-finished, and finished goods. This omission hindered financial efficiency across plants. Production Disruptions Due to Raw Material Shortages The Rourkela, Bokaro, and Durgapur steel plants faced shutdowns of their Blast Furnaces due to inadequate stock levels of essential raw materials like iron ore, coke, and sinter. The disruption led to a production shortfall ...