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Thursday, July 17, 2008


Wednesday, July 16, 2008

The Minister for Steel, Chemicals and Fertilisers Shri Ram Vilas Paswan today urged the steel industry to continue to support the effort of the government in managing the inflationary trend in the country. Delivering inaugural address of the “India Steel Conclave” here today, the Minister said that government does not want the industry to suffer and is concerned about the rise in the cost of the raw materials. He urged the industry to ensure that the profit levels are not disproportionate to the rise in cost of production. Shri Paswan said a fine balance has to be ensured between the consumers interest and the interest of the industry.

The Minister said, the Indian Steel Industry is on way to emerge as the 3rd largest in the world by 2015 and emphasized the need to implement all expansion programmes in a time bound manner. He said the Ministry is closely monitoring the major steel investment projects for which an Inter-Ministerial Group (IMG) has been functioning under the Chairmanship of Secretary, Steel since last year. The progress of public sector steel units are also being closely monitored. By the year 2012, it is estimated that India would have a steel production capacity of 124 million tonnes from the current level of 59 million tonnes. Taking into account the investments in pipeline Indian steel production capacity would be nearly 300 million tonnes by the year 2020.

The Minister said, such a massive investment in the steel sector will involve a number of issues to be sorted out. Steel is a highly capital intensive industry which depends upon allocation of raw material resources, land, water, environmental & forest clearances as sell as development of huge infrastructure. A part of the issues have to be looked into by the State Governments concerned. Shri Paswan said, in some of the States

even the Rehabilitation and Settlement (R&R) Policy was not framed. Land Acquisition and forest clearances are the two major bottleneck being faced by most of the greenfield steel projects. There is also the issue of delay in iron ore mining lease to major steel producers.

He said, steel industry and the associated mining activities are usually located in relatively underdeveloped regions of the country, dominated by underprivileged and tribal population. The industry has a responsibility for looking after the needs of the local population and act as a facilitator for social development. Shri Paswan said, Corporate Social Responsibility (CSR) assumes a significant role in this area. All profitable PSUs under the steel Ministry have made commitments to the cause of CSR and have earmarked at least 2 per cent of their distributable surplus for CSR activities. He said, we have also asked the main producers to adopt villages around their plant locations as a part of the CSR activities.

Speaking at the inaugural session, Secretary, Ministry of Steel, Shri R.S. Pandey said the Government has taken several steps to help reduce the cost of production. He said excise duty has been slashed by 2 per cent in the Union Budget, import duty on scrap has been removed and 15 per cent ad veloram duty has been imposed on the export of iron ore. Besides this, 44 per cent of the steel produced is from captive mines where the cost of iron ore as a proportion of the cost of production is only 5 per cent compared to over 30 per cent for those depending upon spot market for their requirement of iron ore.

Shri Pandey said the Government and the industry will have to find a way out of the price situation. Industry has to decide a point of balance between the need of the consumers and their price expectation. He was very emphatic that the country will reach the production target of 120 million tonnes in the next four years. He said the first and the foremost task is to expedite the expansion of steel capacity.

Ministry of Steel, Government of India

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