Domestic steel gets infra boost
Domestic steel will now get preference in infrastructure under the national steel policy approved by the Union Cabinet on Wednesday. The move would boost the sales of debtladen steel companies.
The policy would focus on increasing the country’s annual steel production to 300 million tonnes (mt) by 2025, entailing an investment of ~10 lakh crore by 2030-31.
“India should have a globally competitive steel industry and we want that the per capita steel consumption in the country should be 160 kilos by 2030,” said Finance Minister Arun Jaitley, while briefing the media after the Cabinet meeting.
The existing per capita steel consumption of the country is 60 kilos. The government is of the view that the surplus steel capacity should be utilised for government-funded infrastructure projects. The central government plans to create selfsufficiency in steel production by providing support and guidance to private manufacturers, micro, small and medium enterprises, and public sector companies through this move.
The government had earlier said it was considering making domestic steel use binding for state-funded projects.
The policy would also encourage adequate capacity additions, cost-efficient production, besides facilitating foreign investment in the steel sector. The steel sector presently employs about 2.5 million people and has a capacity of little over 120 mt. Government think-tank NITI Aayog had mooted the idea for a new steel policy to bring the over $100billion industry back on track.
The policy would be the second such decision by the central government to revive the sentiment in the steel industry. From February 2016 to February 2017, the government had imposed a minimum import price on various steel products in order to curb cheap imports, mainly from China. The non-tariff barrier helped improve the financial situation of domestic steel companies. Crude steel production in 201516 stood at 89.77 mt, while steel imports in 2016-17 (AprilMarch) stood at 7.427 mt, down from 11.712 mt in 2015-16. Imports in March 2017 (0.8 mt) was down 19.7 per cent over March 2016, but was up 51.8 per cent over February 2017.
“Given such trends in export-import, India emerged as a net exporter of total finished steel during March 2017 as well as April-March 2016-17,” the latest report by the Joint Plan Committee (JPC) said. India’s consumption of total finished steel saw a growth of three per cent in April-March 2016-17 (83.93 mt) over same period of last year. Consumption in March 2017 (7.989 mt) was up 2.2 per cent over March 2016 and was up 13.4 per cent over February 2017, the JPC report added.