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Year End Review’04
The Iron and Steel Industry contributes about Rs.8000 crore to the national exchequer in the form of excise and custom duties apart from earning foreign exchange of approximately Rs.3000 crore through exports. Approximately, 15 per cent of the railway revenue comes from the iron and steel industry. Today, India is the largest producer of sponge iron and the eighth largest producer of steel in the world, employing over half a million people directly 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 sector of India , a major propeller of economic growth had to pass through one of the toughest period in recent history, just a few years back. Survival and resurgence of industries in the sector called for astute managerial skill, exemplary foresight and determined leadership. The year 2004 has proved to be a glorious one for the sector. Continuous monitoring, guidance and unequivocal support from the Government has provided the silver lining. The achievement made during the year 2004 is a testimony of this story of succuss .
POLICY FRAMEWORK FOR INVESTMENT IN THE STEEL
SECTOR AND ASSISTANCE PROVIDED BY THE MINISTRY OF STEEL
To facilitate growth of the steel industry, the government has delicensed the iron and steel industry and has removed it from the list of industries reserved for the public sector. Pricing and distribution of steel have also been deregulated. To facilitate induction of latest technologies, import of technology has been liberalised. To support availability of adequate finance, 100 per cent Foreign Direct Investment is permitted in this sector under the automatic route. Customs duty on raw materials have been progressively reduced to meet the requirement of the industry as also to reduce the cost of production of steel. Certain restrictions have been placed on export of high-grade raw materials so as to ensure sustained availability of these raw materials for domestic industry.
In addition to above, Ministry of Steel is in the process of formulating several policy initiatives to augment investment in the steel sector. These are:
Formulation of a National Steel Policy for providing a sector specific policy framework for the development and growth of the Indian Steel Industry on a sustained basis.
Preparation of a discussion paper on de-bottlenecking strategies for supporting growth of the steel sector in the near and medium term.
Preparation of a compendium of guidelines for investment in the sector to facilitate selection of location, technology, raw material etc. for use by entrepreneurs, lending institutions/banks etc.
NEW STEEL POLICY:
In order to meet increasing domestic and international demand, the Government has formulated a draft national steel policy which targets a production of over 110 million tonnes by the year 2020. The basic objective of the National Steel Policy is to create enabling conditions for globally integrated Indian Steel Industry and to expand its production base adequately in response to the anticipated increase in domestic and overseas demand in the coming decade.
Production capacities of different steel plants including those in private sector are being increased and attempts are being made to revive sick and closed units. Accepting challenge of international competition in steel production, Steel Authority of India has prepared a corporate plan 2012, which envisages strategic goals for the company. The Ministry of Steel has approved merger of Indian Iron and Steel Company (IISCO) with SAIL.
The total production of finished steel during April-November 2004, has been provisionally estimated to be about 250.00 lakh MTs as against the production of 239.89 lakh tonnes during the same period last year showing an increase of 4.2 per cent.
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