Steel ministry plans additional Rs 10 lakh crore investment in draft steel policy

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. A major part of that demand is likely to come from infrastructure like highways, oil refineries, bridges, airports, urban infrastructure , water transportation and sanitation, construction, engineering, automotive, energy, packaging and Railways among others. However, in a key admission the policy recognizes shortage of metallurgical coal as a major disadvantage of the steel sector, the draft steel policy aims at increasing supply of domestic coking coal to cut dependence on imports by half. India currently imports around 70% of its coking coal requirement. The steel sector presently employs about 25 lakh people and has a capacity of little over 120 million tonnes. 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.” As part of the draft policy per capita steel consumption is poised to go up to 160 kg by 2030-31 from the present level of around 61 kgs. Incidentally, global average per capita steel consumption is way ahead at 208 kgs. The policy draws inspiration from the fact that in 2015 India was the only large economy in the world where steel demand continued to demonstrate positive growth at 5.3%, against negative growth of 5.4% in China and 7% in Japan.

Translate »