Jamshedpur, Dec 24: Tata Steel plans to discontinue canteen subsidy for its Jamshedpur plant workers.
During a meeting of the Central Canteen Management Committee (CCMC) on Tuesday, the company’s management explained the rationale behind the move.
Mukesh Agarwal, Chief HRBP-Steel JSR, who chaired the meeting, explained that the company was grappling with escalating costs. “The Jamshedpur plant incurs more expenses for canteen services than all other plants in the country combined. We cannot continue offering these subsidies given the company’s current financial situation,” said Agarwal. He went on to state that Tata Steel currently spends ₹45 crore annually to subsidize food for employees, while only Rs 24 crore is recovered through the nominal fees paid by the workers for their meals.
The total expenditure on the canteen services amounts to Rs 69 crore annually, with the company bearing the difference of Rs 45 crore. According to Agarwal, the rising financial challenges faced by the company have made it impossible to continue with such subsidies. “To sustain the canteen operations, we have decided to move towards a ‘no profit, no loss’ model, which means that employees will now be required to pay the full price for their meals,” Agarwal clarified.
Since its inception, the Jamshedpur plant’s canteen has been known for offering food and snacks at very affordable prices. This subsidy system has been a significant benefit for employees, as the company would absorb the cost difference between the total expenditure and the amount paid by workers. However, in light of Tata Steel’s ongoing financial strain, this subsidy system will be phased out, and employees will now face higher prices for food and snacks.
This decision is part of a broader strategy by Tata Steel to cut costs and streamline operations in response to its financial challenges. Earlier, the company had already reduced certain facilities for its officers, and now, employees’ benefits are being scaled back as well. The cut in the canteen subsidy is seen as the first of many steps the company may take to reduce costs in the coming months.
