‘Stress in steel sector has eased a lot’

The government is focussed on bringing domestic steel producers out of their distress. In an interview with Jyoti Mukul and Megha Manchanda, Steel Minister BIRENDER SINGH describes how he is going about implementing a new steel policy. Edited excerpts:

The Cabinet recently cleared two policies for the steel industry. How will those policies benefit the industry? For the last three years, the steel industry was facing stress, so we thought that instead of adopting stop-gap measures it would be better to have a policy. Two previous policies could not achieve targets so it is important to have a road map for promoting steel consumption and production. We have a per capita steel consumption of 65 kg, we are aiming to reach 160 kg in the next 14 years.

How do you plan to improve inputs for steel?

We are importing 80 per cent of our coking coal. One of the thrust areas in the policy is to replace imports, which are mainly from Australia. We have to establish sources that can replace coking coal. Washeries is one such. A washery can be built for ~100 crore and if the coal is washed at the pit-head it can be a key input for the blast furnace. If the ash content in coking coal is reduced by 20-30 per cent, we will save ~8,000-~10,000 crore. We also want to promote pelletisation for which public sector or private steel companies can come forward.

These two things put together will make our industry more competitive. We will be able to reduce the cost of inputs by 10-15 per cent.

How will you promote washeries?

Any company interested in setting up a washery will be facilitated. Private companies are keen on setting up washeries. We do not have any provision or plan for a subsidy though.

Is there any assessment of demand from compulsory use of domestic steel in infrastructure projects?

The current Budget (2017-18) has a provision of ~4 lakh crore for the infrastructure sector. About 10 per cent, or ~40,000 crore, can go to the steel sector. We are ready to import any kind of technology and if foreign companies want joint ventures with public sector or private players, they will be welcomed.

How do you see the resolution of nonperforming assets in the steel sector?

The steel ministry can only create a situation where stress in the industry is released. The banking sector was liberal in extending loans and then there were problems. But for the last five or six months, loans are being paid back regularly. To a great extent, the stress is eased.

“By imposing restrictions like anti-dumping duty, we have covered 75 per cent of the steel industry, including secondary producers”

The government took measures against cheap imports. Were these successful?

Now the minimum import price is no more there. By imposing restrictions like antidumping duty, we have covered 75 per cent of the steel industry, including secondary producers. In some items, imports are nil now.