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Major Decisions and Initiatives
STEEL
The UPA Government completes one year on May 21, 2005. During this period, the Government has taken several important initiatives. Some of these are being brought out in the series ‘Major Decisions and Initiatives’.
India is the largest producer of sponge iron and the ninth largest producer of steel in the world, employing over half a million people directly with a cumulative capital investment of around Rs. One lakh crore. It is a core sector essential for economic and social development of the country and crucial for its defence. The Indian 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.
The steel sector of India, a major propeller of economic growth had to pass through one of the toughest periods 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 2004-05 under the UPA Government has proved to be a glorious period for this sector. Continuous monitoring, guidance, interaction, and unequivocal support from the Government has provided the silver lining. The achievements made during the year 2004-05 after implementation of the National Common Minimum Programme (NCMP) is a testimony of this story of success. The total production of finished steel from April 2004 to March 2005 has been estimated to be about 383.25 lakh tonnes as against the production of 369.57 lakh tonnes during the same period last year showing an increase of 3.7 per cent.
Steel Policy
The Government has formulated a draft National Steel Policy (NSP), which targets production of over 100 million tonnes of steel by 2020. The basic objective of the NSP is to achieve global competitiveness not only in terms of cost, quality and product-wise but also in terms of global benchmarks of efficiency and productivity.
Merger of IISCO with SAIL
The Government has taken initiative to merge IISCO with SAIL. SAIL and IISCO Boards have already given in-principle approval. Initiatives have also been taken for reorganisation of companies of the Bird Group, which , though not Government Companies are under the administrative control of the Ministry of Steel. The initiatives have been taken in view of good financial performance of Orissa Minerals Development Company Limited. Draft rules have been framed and the entire exercise is expected to be completed by next month. The Ministry of Steel has recommended removal of iron and steel from the list of commodities classified as essential under Essential Commodities Act 1955.
Interaction With Stakeholders
The Ministry of Steel interacted with Stakeholders for reviewing export policy of chrome ore and manganese ore. Based on views expressed by stakeholders, recommendations have been made to the Department of Commerce for maintaining status quo in the export policy for chrome ore and manganese ore and putting export ceiling of seven lakh tonnes on export of chrome concentrate.
Iron Ore Pricing
A study has been made in April 2005 to rationalise iron ore pricing by the three public sector iron ore companies, viz. National Mineral Development Corporation, Kudremukh iron ore company Limited and Orissa Mineral Development Corporation. The study is being examined. An expert group has been constituted in April 2005 to suggest guidelines to be followed by State Governments in recommending to the Government of India mining leases for iron ore, chrome ore, and manganese ore .
Steel PSUs Excel in Production and Finance
The year 2004-05 witnessed all round achievements for Steel companies in terms of finance, net profit and production. A table showing profit before tax by Public Sector Steel Companies is appended below:
Profit Before Tax
(Rs. in crore)
2003-04
2004-2005
SAIL
2628
5739 (Prov.)
VSP
2023.7
3090(Prov.)
KIOCL
407.74
1075.82
SIIL
20.53
21.43
NMDC
616.02
1190.66
MOIL
45.29
185.18
HSCL
(-)88.50
(-) 29.48
MECON
(-)10.72
10.68
BRL
(-)9.40
4.01(Prov.)
MSTC
33.70
65.35
FSNL
8.31
8.35 (Prov.)
Bird Group Companies
(Rs. in crore)
2003-04
2004-2005
OMDC
156.62
236.38
BSLC
(-)48.75
(-)53.51
KDCL
(-)1.08
(-)1.07
SSL
(-)5.85
(-)6.90
MoU between Ministry of Steel and SAIL
A Memorandum of Understanding between the Ministry of Steel and the Steel Authority of India Limited signed recently for the current financial year envisages all round growth in steel industry in India. SAIL is committed to attain a Gross Margin /Gross Block Ratio of 24.3 per cent during the current financial year. Gross margin of SAIL would be Rs. 7,000 crore during 2005-06, whereas Gross sales would be Rs. 30,760 crore. A capital expenditure of Rs.900 crore could be incurred during the year in the areas of projects. SAIL has drawn a directional roadmap for the current financial year. The plan drawn in two phases – upto 2006-07 and 2011-12, to correspond with X and XI Plan. The major goals/objectives of the Plan drawn by SAIL are to continue to be mainly in the business of steel and steel-related activities, protect market share of about 26 per cent and grow by focusing on increasing share in growth segments, achieve hot metal production level of 20 MT by 2012 and to aim at achieving international/national benchmarks on production cost and consumption ratios especially in new units, with due allowance for prevailing conditions, technology faculties, inputs, etc.
RK:LV
PIB SF-50 (17.5.2005)
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