Use of domestic steel may be mandatory for government infra projects

10 April 2017

India is likely to mandate use of domestic steel for government infrastructure projects to boost demand for local companies and check cheaper imports.

The Steel Ministry is likely to take to the Union Cabinet this month a proposal that seeks to provide preferential treatment to steel made in India in government projects. It may also seek Cabinet approval for the National Steel Policy (NSP), 2017 which seeks to double production as well as consumption and put forth strategies to overcome challenges like high input costs and financial stress facing the sector.

“We want to promote and encourage the growth of domestic steel industry and so we want that India-made steel should be given preference in government funded projects. A draft Cabinet note has already been initiated,” Steel Minister Chaudhary Birender Singh said here.

He was addressing a national conference of secondary steel producers. Asked whether the government plans to make it mandatory or on preferential basis, Singh said: “This should be taken on a preference basis. In government ministries and departments where the consumption of steel is more, like Railways, I want that on the preference basis, they should use steel made in India and it should be made part of the tender.” Singh added however that steel which is not available in the country can be imported.

There would be a quantum jump in the steel consumption once the proposal is approved, he said, adding Railways, urban housing, shipping and national highways are big customers. The government, will spend Rs 4 lakh crore on infrastructure projects, which will boost steel demand.

On the new steel policy, Singh said: “We have already released the draft policy. We have also received feedback from stakeholders. We will include any good suggestions made by secondary steel producers. In this month only, we will send it to the Cabinet for approval”. Through this policy, he said, the government plans to more than double the steel production capacity and per capita consumption from the present level.

In January, the ministry had released the draft policy to ensure that the steel sector follows a sustainable path of development in respect of augmenting capacity to 300 million tonnes by 2030-31 in environment friendly manner. It is an effort to steer the industry to achieve its future potential and strategy to deal with various impediments like high input cost, availability of raw materials, dependency on imports and financial stress.

“India is going to become the second largest steel producer in the world by 2018,” he said.

Steel Secretary Aruna Sharma said the country’s steel production is estimated to rise 11 per cent at over 90 million tonnes, while exports increased 57 per cent last fiscal. Imports are estimated to have declined by 34 per cent, she added.

Singh said the steel industry has to become a growth enabler for the manufacturing industry and also a catalyst for the Make in India campaign. “We are looking at new areas where steel use can be promoted based on steels inherent strengths. Steel crash barriers, railway sleepers, bridges, roads, houses, buildings, community centres and other such end-use segments are being explored,” he added. He said secondary steel producers are important as they account for 57 per cent of the total output and provide huge employment compared to integrated plants. He asked all segments of secondary steel sector to come together under a single apex organisation to collectively present their issues and concern to key stakeholders.

Earlier, Housing and Urban Development Minister M Venkaiah Naidu said Make in India campaign has identified 25 sectors in manufacturing, infrastructure and service activities as the focus areas to drive the economy. For at least 9 of these sectors like automobile, defence, railways and construction, steel plays a crucial role in their competitive edge, he said. “Steel is also a crucial component in the successful implementation of the governments other flagship programmes like Smart Cities Mission and Housing for All,” he added.

In India, Naidu said, the steel sector has an output multiplier effect of nearly 1.4 times on GDP and employment multiplier factor of 6.8. India today stands as the 3rd largest producer of steel in the world, after China and Japan. “The steel sector employs about 25 lakh people and the draft National Steel Policy 2017, expects at least 11 lakh new jobs being created by 2030-31,” Naidu said.

Source – indiatoday.intoday.in