New steel policy likely
new steel policy is on the anvil to facilitate the steel industry in increasing production from 81.2 million tpa currently to 300 million tpa by 2025, Minister of State for Steel Vishnu Deo Sai announced at the Steel Summit 2014 organised by the Confederation of Indian Industry in New Delhi recently. The new policy is likely to focus on capacity addition and address issues related to raw material security, environmental challenges and land acquisition.
The minister also informed that discussions were underway on establishing an eastern corridor to address freight and other logistics issues faced by the steel industry. There should also be a national body to supervise and undertake research in the steel sector, he felt.
Naveen Jindal, Chairman, Jindal Steel & Power Ltd, said that steel was still very expensive for the common man and as a result per capita consumption had been almost stagnant. For costs to fall, output must increase. To increase output and meet the goal of 300 million tpa by 2025, government support and favourable policies were essential.
Ajay Shriram. President, CII, and Chairman and Senior MD, DCM Shriram Ltd, pointed out that the demand for steel was bound to accelerate with India building much-needed infrastructure. To develop a roadmap, he suggested creating a joint task force with industry and ministry as partners to bring in all diverse stakeholders together for an action agenda for the sector.
Union Steel Secretary Rakesh Singh said that the government’s effort to increase the share of manufacturing in GDP from 16 per cent to 25 per cent put great responsibility on the steel sector. To encourage greenfield units, he said that discussions were on regarding special purpose vehicles in association with the state governments. These SPVs would ensure raw material linkages and clearances for the project, and then be auctioned or sold to the private sector through appropriate mechanisms.
Earlier, C.S. Verma, Chairman, CII National Committee on Steel, and Chairman, SAIL, outlined the various challenges hindering the steel industry from realising its potential. He highlighted the unavailability of raw materials, high cost of logistics, human resource gaps and low R&D spend. He also pointed to the need to review FTAs, especially for CEPA and dumping by China under the guise of alloy steel.
Firdose Vandrevala, Executive Vice Chairman, Essar Steel, pointed out the need for Indian steel to be at the lower end of the cost curve else it would not inspire confidence in the investor. For that, the three profit pools relating to steel, coking coal and iron ore must be integrated. He also questioned why steel was not being given infrastructure status while power and hotel enjoyed the privilege.
Improving public education is the responsibility of the government and we are also working in collaboration with various state governments. Transforming education is a very complex task, given the diversity of our country, compounded by issues of socioeconomic deprivation and other ground realities. Citizens should also help the government. — Azim Premji, Indian business tycoon and philanthropist