Draft steel policy to enable Rs.10 lakh crore investments

Draft steel policy to enable Rs.10 lakh crore investments The Steel Ministry has proposed setting up greenfield steel plants along India’s coastline to tap cheap imported raw materials such as coking coal and export the output in a more cost-effective manner, as part of the new draft National Steel Policy of 2017. The policy, which envisages to more than double India’s domestic steel production

capacity to 300 million tonnes by 2030-31, anticipates a requirement of ₹10 lakh crore of fresh investments to meet that goal and expects at least 11 lakh new jobs being created in the process. The steel sector presently employs about 25 lakh people and has a capacity of little over 120 million tonnes.

However, some elements of the policy, on which comments have been sought till January 23, are still work in progress, such as its vision statement, for instance.

The draft policy lays out two alternatives of its vision — “to create a globally competitive steel industry that promotes inter-sectoral growth” or “to create a self-sufficient steel industry that is technologically advanced, globally competitive and promotes inclusive growth.”

While it focuses on impediments like high input costs, availability of raw materials, import dependency and financial stress plaguing the sector, projections made under the policy for a couple of factors are all still under discussion, such as the demand and production of sponge iron.

To cut down reliance on expensive imports of coking coal, the policy has mooted gas-based steel plants and technologies such as electric furnaces to bring down the use of coking coal in blast furnaces.

PSU units

Public sector firms in the steel sector should aim for economies of scale and will be encouraged to divest their non-core assets through mergers and restructuring, according to the policy.

“Establishment of steel plants along the coast under the aegis of Sagarmala project will be undertaken.

Such plants would be based on the idea of importing scarce raw materials and exporting steel products,” the policy stated, adding that a cluster-based approach will be pursued, especially for micro, small and medium enterprises to ensure optimum land use, easy availability of raw materials and economies of scale.