STEEL INDUSTRY MILESTONES
1999-2002
The iron and steel
industry contributes about Rs.8,000 crore to the national exchequer
in the form of excise and custom duties apart from earning foreign
exchange of approximately Rs.3,000 crore through exports. Approximately
15 per cent of railway revenue comes from the iron and steel industry.
Today, India is the 10th largest producer of steel
in the world with an installed capacity of 33 million tonnes,
employing over five lakh people directly, and with a cumulative
capital investment of about Rs.90,000 crore. It is a core sector,
essential for the economic and social development of the country
and crucial for its defence. The steel industry in India was passing
through a crucial period at the fag end of the last century. So
during last three years, the Government has taken a number of
initiatives to revive the steel sector and make it vibrant.
Hike in Production
and Export of Iron & Steel
By the intensive
efforts made during the last three years, the industry is poised
for recovery and has been looking towards an upsurge of activity.
During the year 2001-02, the total steel production has touched
30.63 million tonnes, recording a growth of 4.6 per cent over
29.27 million tonnes in 2000-01. The imports of steel at 1.37
million tonnes showed a decline of 3 per cent compared to 1.42
million tonnes in the previous year. The export of steel at 2.77
million tonnes was higher by 4 per cent compared to 2.66 million
tonnes last year. The apparent consumption of steel has grown
by 2.6 per cent and reached 27.21 million tonnes. Now that the
national and international markets are coming up, there is enough
scope for the steel industry to flourish.
Performance Of
Public Sector Plants
Production of saleable
steel from the main integrated steel plants of SAIL has gone up
from 8.33 million tones to 9.46 million tones in 2001-02, a growth
of 14 per cent during the last three years. During the current
year, SAIL has fixed a target to increase production by one million
tonnes over the last year. The performance of SAIL in the first
quarter reveal that it has reduced its losses by Rs.67 crores
more over the corresponding period of last year. The consumption
of coal and energy has been brought down substantially during
the last three years and the modernisation has helped increase
the production.
During this period,
Visakhapatnam Steel Plant (VSP), the only shore-based integrated
steel plant in India, has achieved full ISO-9002 certification,
the first for any integrated steel plant in India. The company
has surpassed the targets set in the production of hot metal,
liquid metal and saleable steel. VSP has reduced the cumulative
net loss from Rs.562 crore in 1999-2000 to Rs.125 crore in 2001-02.
It has exceeded its rated capacity in almost all parameters and
received a number of national awards to its credit.
National Mineral
Development Corporation (NMDC) during the year has produced 15.54
million tonnes of iron ore and 81040 carates of diamond, representing
104 per cent and 113 per cent of targets respectively. It has
achieved record iron ore and diamond production during these three
years. It has made in roads into China, the most potential emerging
market for iron ore export. It has achieved record iron ore and
diamond production during these three years
During 2001-02, KIOCL
produced 5.4 million tonnes of concentrate and 3.2 million tonnes
of pellets and exported 2.3 million tonnes of concentrate and
3.2 million tonnes of pellets. Total sales were of the order of
Rs.722 crore which is the highest since inception. Manganese Ore
India Ltd.(MOIL), the single largest producer of high grade manganese
ore, achieved a turnover of Rs.167.92 crore in 2001-02. The company
gave 27 per cent dividend during 2000-01.
Kudremukh Iron Ore
Company Ltd. (KIOCL) and National Mineral Development Corporation
Ltd.(NMDC), two of the public sector undertakings of the Ministry,
have received PM’s MoU (annual target) award for the year 1999-00
and 2000-01, respectively. These are for the top performance among
the PSUs for which around 250 participants vie for the coveted
recognition every year.
Indian Sponge
Iron Industry
The Ministry is playing
an effective role in facilitating the growth of sponge iron industry
in India. With a production of 5.7 million tonnes of sponge iron
in 2001, India has emerged as the largest producer of sponge iron
in the world.
Revival Measures
A business and financial
restructuring package for Steel Authority of India Ltd. (SAIL)
was approved by the Government in the year 2002, which includes
waiver of loan from the Steel Development Fund and the Government
of India, provision of Government guarantees to raise loan to
enable the implementation of the Voluntary Retirement Scheme and
repayment of past obligations, disinvestment of its non-core assets
and protecting jobs of the existing employees. A detailed MoU
was signed between the Ministry and SAIL incorporating milestones
for the implementation of the package.
This is a landmark
decision in the history of Indian PSU restructuring and has provided
SAIL a long-term solution for its rejuvenation. While financial
restructuring package for SAIL has been implemented, the assets
restructuring is at various stages of implementation. Disinvestment
of captive power plants at Rourkela, Durgapur and Bhilai steel
plants has been completed as per schedule. SAIL is pursuing the
matter for an early finalisation of the divestment process so
that full benefits of the restructuring are achieved.
The Government has
approved a revival package for Indian Iron & Steel company
(IISCO) and another for Bharat Refractories Ltd.(BRL) to revive
the ailing companies.
Vision-2020
The Ministry has
initiated steps to frame a National Steel Policy to give the industry
a national perspective and to prepare a roadmap for the steel
sector. It has brought out Vision-2020 to make the steel sector
vibrant in the coming two decades. It has planned to formulate
a National Campaign Committee to penetrate rural marketing with
an aim to triple steel demand by 2020. Other objectives are to
discourage import of seconds and defectives, make eco-friendly
steel scaffolding compulsory in all construction activities and
popularise steel truck bodies to achieve this end.
Round Table on
Steel
Soon after the formation
of the new Government, the Ministry organised a Round Table on
Steel in October, 1999 with a view to holding wide-ranging discussions
with the captains of the steel industry in the public and private
sectors, financial institutions, industry associations and experts.
Actions on important recommendations of the Round Table have been
initiated and matters have been taken up with the concerned ministries
and agencies.
Project Co-ordination
Group
A Project Co-ordination
Group (PCG) under the chairmanship of the Minister for Steel has
been constituted. Regular meetings of the PCG have facilitated
personal interface between the entrepreneurs and members of the
PCG. It discussed issues relating to demand generation, duty matters,
exim policy and rising cost of inputs. The problems of ongoing
and new iron and steel projects were also taken up.
Research and Development
An empowered committee
constituted by the Government has approved 24 research projects
worth Rs 167.77 crore. The approved research projects cover areas
from improvement in mining methods, improvement of properties
in coal, reduction in refractory consumption, improvement in productivity,
utilisation and treatment of wastes and containment of pollution.
A few projects have been completed. The outcome of research is
being used for the improvement of energy consumption and for increasing
the use of steel in structural purposes.
For energy efficiency
improvement in steel re-rolling sector in India, the Ministry
has obtained approval for US $ 3,40,000 out of which UNDP/GEF
contribution will be US $ 280,000 and the share of the Government
will be US $ 60,000 (in kind)
Foreign Direct
Investment
Hundred per cent
Foreign Direct Investment through automatic route in the iron
and steel sector has been allowed by the Government.
Raw Material and
Transport Promotion
To provide raw materials
and transport linkages to sponge iron, pig iron, steel and coke
oven units during the last 3 years, Linkage Committee has met
regularly and assured supply of main raw materials and committed
transport linkages to iron and steel units in the country.
Remedial Measures
to Rejuvenate Steel Sector
Anomalies in import
duty on refractories and their raw materials have been removed.
Import duty on import on seconds and defectives of HR Coils has
been enhanced. For infrastructure projects higher allocation has
been made and tax holiday has been allowed. The Development Commissioner
for Iron and Steel has launched a national campaign for increasing
the demand for steel, especially in non-traditional sectors such
as rural and agro-based industrial sectors. The Ministry is also
advocating ban of asbestos sheets in construction, compulsory
usage of steel scaffolding in place of bamboo scaffolding, development
of welding centers in rural areas, truck bodies made of steel
and use of more steel in Indira Awas Yojana Scheme and roofing
railway platforms. Duty Entitlement Pass Book (DEPB) rates for
steel exports have been rationalized.
National Steel
Institute
A National Steel
Institute has been established at Puri to cater to the needs of
training, service, consultancy and research and development of
the steel producing belt of southern and eastern region.
Issues Concerning
Railways
The Ministry of Railways
has agreed to rationalise freight classification of steel and
its raw materials with a view to reducing financial burden on
the steel industry. It has also agreed to consider issues relating
to minimum chargeable distance. An important outcome is that the
Railways, in future, would take all rails in the 52 and 60 kgs.
category produced by the Bhilai steel plant.
Fighting out Anti-Dumping
Measures
The Department of
Commerce of the United States imposed very high anti-dumping duty
on import of CTL steel plates from SAIL. Government of India challenged
this in the WTO and requested for setting up of a Panel in June,
2002. The WTO Panel concluded that the United States acted inconsistently
with the WTO Anti-dumping Agreement in refusing to take into account
US sales price information submitted by SAIL. The Dispute Settlement
Body of WTO has considered and adopted the panel report in August,
2002. High level steel teams headed by the Steel Secretary visited
the US and discussed the issue at the Government level. The exchanges
have contributed to a better appreciation of India’s concerns
by the US administration. The US government has granted exemption
to India from the recently imposed safeguard measures, except
for the category of exports of carbon flanges.
In Search of New
Markets
India is in search
of a new market in South-East Asian countries which are showing
signs of economic revival. Attempts to explore additional markets
in the Middle East, Bangladesh, Myanmar, South Africa, Mexico,
Taiwan and some other countries have been successful.
