The Union steel ministry is working on the draft of a new national policy, which aims to replace the 2005 norms, and make it in sync with the changing global dynamics. India hopes to be the no 2 producer of steel in the world, only next to China. The sector’s rapid and structured growth will help boost the nation’s infrastructure. Excerpts :
Presently, India ranks fourth in steel production. How do you see its future?
India is No 4 in steel production and China is on top. But by 2020, our production will cross 200 million tons, and we will become No 2 in the world. China will still remain No 1 as it does not export steel. Though we have increased the export duty from 5% to 20 % to curb the export, and we are going to increase the duty by another 10 %. Government policy suggests export cannot be banned.
Recent land acquisition rules could prove to be a big hurdle to this industry. What’s your take?
The land acquisition is a big hurdle to mining and setting up a plant. But the land acquisition bill is tabled in the Lok Sabha and will be through after a few debates. The steel ministry has asked state governments to allot useful land, The ministry has decided to set up steel processing plants in Uttar Pradesh’s Barabanki, Jhansi, Mirzapur,Gonda, The ministry of mining has apprised the steel ministry about the huge iron ore deposit at Lalitpur in Uttar Pradesh. We have requested the U.P. government to allot the land to us, and we may set up a steel plant at Lalitpur in the future. We would require 2,000 acres to set up the plant. The U.P. government should extend support since it will help create employment opportunities.
Experts say the steel industry is facing a scarcity of coking coal. With the fate of over 100 iron ore mines in south India hanging in balance, production could take a severe hit. What’s your opinion?
There is no shortage of coking coal, and production does not suffer because of its scarcity. We are importing coking coal from Australia, New Zealand and the US, though the profitability has gone down due to its high cost. Most of the small and medium-sized steel industries don’t require coal for producing steel as they have induction and electric
furnaces.
The ministry is formulating a new national Policy and a vision document on steel sector. Could you shed some light on it?
The ministry is working on a new steel draft policy, which is likely to be ready by December.
Four sectoral committees have been formed to study various aspects. The proposed National Steel Policy (NSP) that would replace the 2005 norms is likely to be more robust and focus on regulatory hurdles, taxation issues and infrastructure bottlenecks. Besides, the policy would address the industry’s increasing dependence on imports by increasing production. A panel, under top steel officials and experts, was set up to draft the new policy to suit the industry’s changing dynamics. The ministry is also planning to ensure that Indian companies secure raw material assets more aggressively. Once the draft is ready, an inter-ministerial panel will discuss the proposed changes, and then the final report would be sent to the Cabinet for its approval.
The committee, comprising 11 members, will look into the reports of the task force set up by the steel ministry on issues related to environment, raw material, economical and infrastructure ahead of drawing up the final draft. This will also take into account the problems in increasing capacity. We should make India a reliable exporter of quality steel rather than being a net importer. It would also look into boosting capacity expansion. The industry has undergone huge changes since 2005. It will also make the industry take informed decision about investment in new capacities.
Of late, the steel industry has been facing severe problems following delays in projects, obtaining necessary environmental clearances, allocation of mines, protests against land acquisition and high input costs. Besides, the industry is getting increasingly dependent on imports. The new policy would try to address issues that are hindering capacity expansion.
The existing policy had projected an annual growth in steel demand at 6.9%, whereas it is growing in excess of 9%, said C S Verma, chairman of SAIL, who was sitting next the minister.
Steel imports have soared to 7.3 million tons in 2009-10 from 1.4 million tonnes in 2001-02. Several mega steel projects of both foreign and domestic steel conglomerates have not been able to start production since they have not got environmental clearances, hit land acquisition roadblock or still negotiating allocation of mines, the bureaucrat added.
Issues relating to environment, forest and others have stalled work on 222 greenfield projects in various parts of the country. How is the ministry tackling these issues?
With a view to making various operations in steel industry environment-friendly, green audit and life cycle assessment of existing steel plants (including sponge iron units) would be encouraged. This would reduce emissions and effluents, minimize and better manage solid waste generation and improve resource conservation such as energy and water. There are some fine examples of environmental performance in the steel sector. However, the steel sector would join the efforts of other industries to improve environmental performance even more. The secondary steel producers would be proactively assisted in shifting to processes that are more environment-protective. A similar policy would be followed in assisting natural resource industries, such as iron ore and coal mining, where scientific mining and mineral processing would be encouraged. Environmental and forest clearances would be granted within a specified timeframe. Though local value addition would be given priority, the government would encourage iron ore trading to make this essential raw material available to the iron and steel industry across India. The government would encourage investments in adding value to iron ore fines. Scientific mining would also be encouraged through consortia of small users and by prescribing a minimum economic size for mines. The steel industry has been facing severe problems following delays in projects, obtaining necessary environmental clearances, allocation of mines, protests against land acquisition and high input costs. Besides, the industry is getting increasingly dependent on imports.
Both ArcelorMittal and Posco had entered into pacts with Odisha and Jharkhand governments over five years ago for setting up of Rs 1.5 lakh crore projects that are still stuck due to want of various regulatory clearances. Have you taken any initiative to ensure that development of backward states does not suffer for want of regulatory hurdles?
South Korean steel-maker POSCO received a green signal for its $12 billion project in Odisha in early September along with several riders. The ArcelorMittal project is still not cleared as it requires some more regulatory clearances from the ministry of environment and forest (MoEF). We are in talks with the MoEF.
You are seen as an influential Kurmi leader. What has been your contribution for the community?
I am not a Kurmi leader, I am a Congress leader, and I don’t believe in casteism.
You have changed many parties. How comfortable are you in Congress?
I am very comfortable in this party, and this is the right place for me.
You were a founding member of the Samajwadi Party in 1992. How would you compare these two parties as far as their policies are concerned?
The Samajwadi Party was formed in 1993. The ideology of Congress is absolutely different from other political parties, and ours is most suitable for the nation.
