Govt To Set Aside Rs 100 Crore To Boost Indian Steel Industry

The government will set aside Rs 100 crore for setting up research and development (R&D) units to develop requisite technology for the steel industry in India.

“It is under the active consideration of the government to infuse more funds in this initiative to utilize locally available cheap raw material, to remain competitive in the world market”, said Steel Minister Narendra Singh Tomar at an event organized by ASSOCHAM.

He explained that the steel production increased meagerly from 70.67 million ton in 2010-11 to 81.54 million ton in 2013-14. However, the steel capacity has gone up from 80 million ton in the year 2010-11 to 100 million ton in 2013-14, registering an increase of 20 million ton.

“This clearly depicts the sharp drop in capacity utilization to 82% in 2013-14 from the level of 88% in 2010-11. The significant decline in capacity utilization is solely due to the unavailability of Iron Ore to steel industries,” added Tomar.

The Union minister said the fact that the per capita consumption of steel (60 kg) is much lower than that of the international consumption (over 215 kg), is an indication of the gap in prosperity levels between India and the rest of the world.

“This indicates a huge gap in prosperity levels, though it also reflects a huge potential for the growth in steel consumption. Realising the enormous potential the high level committee on manufacturing has decided to plan ambitiously for crude steel capacity of 300 million ton by 2025-26,” noted the steel minister.

Interestingly, the low production and consumption is also indicative of the overall techno-economic performance of the steel industry in India, which is way below the global standards. Experts have attributed the low performance of the key industry to the poor quality of raw materials, outdated existing technology and the lack of thorough research and development to overcome the technological gaps.

“Investment in R&D in Indian steel industry has been very low in the range of 0.15-0.25% of the sales turnover. I will also urge upon the Indian industry to focus on R&D initiatives in a big way to utilize locally available cheap raw material, to remain competitive in the world market”, stated Tomar.