The government is expected to notify a new policy for the steel sector that aims to nearly treble India’s production capacity to 300 mtpa by 2030-31 from around 125 mtpa now with a projected investment of INR 10 lakh crore.
“We published the draft national steel policy, 2017 on January 11. We are now finalising it after incorporating all necessary and relevant inputs from the concerned stakeholders. Accordingly, it is expected to be notified soon and published,” said a senior steel ministry official.
The policy has been formulated envisaging that the industry can be steered with appropriate policy support in creating an environment for promoting domestic steel and thereby ensuring a scenario where production matches with the anticipated pace of growth in consumption.
It also aims to lay more focus on expansion of MSME sector, improving raw material security, enhancing R & D activities, reducing import dependency and cost of production, and thus, developing a technologically advanced and globally competitive steel industry that promotes economic growth.
The policy eyes self-sufficiency in production and developing globally economical steel manufacturing capabilities by facilitating investments and cost-efficient productions with adequate availability of raw materials.
The policy also aims to enhance India’s per capita steel consumption to 160 kg by 2030-31 from around 61 kg now.
However, the government needs to address two primary issues to ensure that the policy does not remain confined only on paper. It has to make sure that enough demand is created to consume the entire targeted production. Also, there is a need to ensure that funding problem does not come in the way of capacity addition.
Through the policy, the government intends to encourage the industry to reduce capital costs and remain innovative in developing appropriate structure of the capital to minimise debt and service equity. The steel ministry will also make necessary efforts to identify bad debts in the sector.
The steel policy is coming at a time when the industry is recovering from a prolonged bad patch resulting from multiple issues like increased operating costs on account of increased logistics & raw material costs and unabated imports.
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