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‘National Steel Policy 2017 will make the sector vibrant, dynamic’

News‘National Steel Policy 2017 will make the sector vibrant, dynamic’

India will soon become the second largest steel producer in the world, leaving behind Japan. This is what Union Steel Minister Chaudhary Birender Singh informed the nation here recently about the achievements of the Ministry of Steel during the three years of the National Democratic Alliance (NDA) government. 

Singh said that the steel sector is only an example of the all-round development India has seen under Prime Minister Narendra Modi’s leadership. “On 3 May this year, the Cabinet under PM Modi approved two policies of the Ministry of Steel and we are working on their implementation. We are very confident that the steel sector will become more vibrant and dynamic after the ‘National Steel Policy 2017’ and the ‘Policy for preference to domestically manufactured iron and steel products in government procurement’ become effective. The roadmap to implement the new policies will be finalised in the next six months to one year,” Minister Singh said.

Speaking about the revival of steel processing units (SPUs), Singh said that three SPUs—Jagdishpur in Uttar Pradesh, Bettiah in Bihar and Kangra in Himachal Pradesh—are going to be operationalised within the next one year. This involves an investment of Rs 500 crore. These units will produce value-added products like crash barriers, black pipes, TMT bars or GC sheets. The Special Purpose Vehicle Route had been adopted by the Government of India for creation of Greenfield steel capacity in May 2015. The process for the same was initiated in Chhattisgarh, Odisha, Jharkhand and Karnataka.

Talking of “Zero Waste Production”, Minister Singh said that a 120 MW power plant was inaugurated in April 2017 at Rashtriya Ispat Nigam Ltd (RINL), Vishakhapatnam, using the waste gases of the steel plant. The Huge Fine dumps, waste slag, slime etc., from steel plants need to be utilised by using innovative techniques for pelletisation of fines, slag-cement for slag towards a clean and green steel sector in India. The Ministry of Steel and the United Nations Development Programme (UNDP) have worked for energy conservation in 300 secondary steel units. There are plans to upscale to 1,000 secondary steel units. This would reduce CO2 emissions, roughly equal to taking all passenger cars off Delhi’s roads, Minister Singh said, adding that the steel industry needs to go for a paradigm shift and move from semi-finished/crude steel to value-added steel. This will lead to better margins and improved competitiveness. “We are hopeful that SAIL and ArcelorMittal would soon formalise a Joint Venture for production of automotive-grade steel. This will be a big step forward under the Prime Minister’s Make in India programme,” Singh added.

Enlisting the new schemes for Secondary Steel Producers in 2017-18, he said that the Ministry of Steel will rate the ranking of Top-50 Secondary Steel/Smart Producers and there will be awards for the best performing plants in the secondary steel sector solely on the criterion of their products of BIS standards and cost effectiveness. The Minister also announced the institution of the “Best Steel Structures Awards” for best steel structures in Pradhan Mantri Awas Yojana (PMAY) (Rural and Urban), building projects, and roads made with steel reinforced cement concrete and other extraordinary structures using steel in abundance.

Minister Singh said that the Goods & Services Tax (GST)regime is good for the steel sector as GST rates and slabs for raw materials like iron ore, manganese, coal etc, are in the bracket of 5%. Semi-finished and unfinished goods are in the 18% bracket. The steel industry will see a reduction in the input costs for steel making with the implementation of the GST.

Minister of State in the Ministry of Steel Vishnu Deo Sai, Dr Aruna Sharma, Secretary Steel, and senior officials from the Ministry and steel PSUs were present on the occasion. Pursuing a clear agenda of growth, the Ministry of Steel has had many firsts to its credit. In 2015, India became the third largest producer of steel in the world. Recent data shows that India is now looking at positioning itself as the second largest producer in the near future. India has already become the  second largest stainless steel  producer in the world.

In the past three years, there has been capacity addition at a steady CAGR of about 7%. There has also been an improvement in the overall capacity utilisation. 

India has emerged as a net exporter of steel in 2016-17, with 97% increase in overall exports and a 37% decline in imports of steel products over the same period in the previous year.

For the first time in the history of steel making in India, the world witnessed a massive demand-supply gap post 2014. Overcapacity of 700 MTPA to 800 MTPA resulted in a sudden fall in global steel prices. 

The aftermath of the increased imports was evident from the declining domestic steel prices, poor cash flows and the debt serviceability of major steel producers in the country. The government protected the interests of domestic producers by notifying trade remedial measures like Minimum Import Price, Anti-Dumping Duty and Safeguard Duty. 

The government also eased financial re-structuring norms through the Reserve Bank of India and the Ministry of Finance. Many steps have been taken to reduce input costs, replace imports and enhance domestic consumption. The government is working to improve the domestic availability of iron ore, coking coal and natural gas.

The government’s focus on strengthening the steel sector has been on ensuring: 

  • Ease of doing business.
  • Developing new products
  • Tackling overcapacity and imports.
  • Sustainable production of steel.
  • Ensuring affordable raw material supply.
  • Demand generation.

The government has populated the three-year timeline with numerous initiatives that comprise steps like increase in Basic Custom Duty, notification of Quality Control Order for steel and steel products, policy on Domestically Manufactured Iron & Steel Products (DMI&SP), National Steel Policy etc.

The most significant and far-reaching of all policy interventions is the rolling out of the National Steel Policy  (NSP) 2017. The policy will be the roadmap for the industry in the coming years and will help in harnessing the sector’s untapped potential. 

The policy reflects the aspirations of the domestic steel industry for achieving 300MT of steelmaking capacity by 2030-31. This translates into an additional investment of about Rs 10 lakh crore and 1.1 million additional workforce getting employed in the steel sector.

Key features of NSP 2017 are:

  • Creating self-sufficiency in steel production. 
  • Encouraging adequate capacity additions. 
  • Developing globally competitive steel manufacturing capabilities. 
  • Cost-efficient production and domestic availability of iron ore, coking coal and natural gas.
  • Facilitating foreign investment and asset acquisitions of raw materials and,
  • Enhancing the domestic steel demand.

As part of NSP 2017, emphasis is also being laid at considering the total lifecycle cost while evaluating projects rather than looking at just the upfront cost in isolation. This would encourage greater usage of steel in government as well as the private sector.

Another strategic push for the steel industry has been the policy to provide preference to DMI&SP in government procurements. This will not just provide a level playing field to the domestic steel industry, but will also promote development of the domestic industry. It will also reduce the inclination to use low quality, low cost imported steel in government-funded projects. India plans to increase steel capacity to 300 million tonnes and per capita steel consumption to 158 kg by 2030-31. The Ministry of Steel is committed to making sure that doing business in the Indian steel sector is easier, more profitable, eco-friendly and sustainable, while making a mark on the global scene.

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