Union Steel Minister Chaudhary Birendra Singh was on his way out during the recent reshuffle, but Dera Sacha Sauda controversy, building tension in view of Jat reservation and his reluctance to accept a gubernatorial post forced Prime Minister Narendra Modi to give him a chance to prove his worth. Singh in his weekly review of the ministry on September 5 spoke about transforming and turning around steel PSUs and bringing accountability and result-oriented approach in their working. Prime Minister Modi has been very particular about result-oriented approach from the day one and he wants his team members to adopt the same strategy. “There will be zero tolerance for laxity in performance,” said Singh under whose leadership steel sector is reeling under multiple woes.
Aware of the fact that Modi can relieve him from the ministerial responsibility any time, Singh has now tasked his officials to play an active role in transforming and turning around steel PSUs. Senior Ministry officials will be given responsibility of monitoring the performance of individual steel plants by on-ground visits and reviews. These officials will check the progress of each plant in terms of achievements of the targets set out for them. It is noteworthy that Ministry of Steel had earlier constituted an Expert Committee, which has made recommendations for improving production and productivity of these plants.
While outlining the agenda for the future, the Minister remarked that no laxity will be tolerated at any level, and there has to be accountability and a result-oriented approach built into the work culture of Ministry of Steel and the PSUs. He also directed the Ministry officials to work on instituting an award of ‘Plant of Excellence’ for the best performing plant among steel PSUs so that other plants can get inspired to excel. The steel production target of 300 million tonnes set in the National Steel Policy-2017 will have to be broken down year-wise and exponential annual increase will have to be ensured for realistic achievement.
Needless to say that Prime Minister Modi’s ‘Make In India’ initiative has the potential to ensure a turnaround in Indian steel sector. The emphasis on infrastructure expansion and upgradation, commitment to make houses available for and return of buoyancy in automobile sector also hold a lot for the country’s steel sector. The industry will have to wait for some more time when the benefits of ‘Make In India’ drive starts galvanizing the steel sector. Similarly, the Central government’s decision to impose 20 per cent duty on steel imports for 200 days will help the domestic players significantly by curbing predatory pricing and surging imports, but the government must evolve a long term strategy for steel industry’s sustained growth. Policy clarity and stability with regard to renewal of miming leases and forest clearances remain key concerns for the industry.
The world’s crude steel production touched 1,665 million tonne (MT) in 2014, showing a growth of one per cent over 2013. China remains the frontrunner in crude steel production, while India is struggling to cross 100 MT figure. To enhance the production capacity to 300 MT so that our dependence on imports is significantly reduced, a favourable policy atmosphere will be needed which addresses all issues related to mining, regulation and major steel consuming sectors like infrastructure, housing and automobiles. A projection by the WSA says that demand of steel in India may grow by 6.2 per cent in 2015 and by 7.3 per cent in 2016 as compared to global steel use growth of 0.5 per cent and 1.4 per cent respectively. It has also been estimated that the use of steel in China, the world’s largest steel producer, will decline by 0.5 per cent in 2015 and 2016, thus Beijing will be left with a huge surplus steel which will find a way in India’s growing market but only at the cost of domestic industry.
Therefore, any complacency on the part of the government in dealing with emerging challenges for steel industry will be a bad omen. One must note that our steel industry has got more vibrant by riding high on the resurgent economy. Indications available suggest that the country’s economy is showing signs to return to vibrancy, but as of now one will like to keep fingers crossed, as any short-term corrections in economy seems to be far-fetched. For example, the Working Group on Steel for the 12th Five-Year plan has pinned a lot of hope on the increase in steel consumption and the investment of a nearly trillion dollars in manufacturing sector to log a projected growth of manufacturing from current 8 per cent to 11-12 per cent. If so, no doubt improved manufacturing activities will have better impact on the health of steel sector. Similarly, the increase in urban population to 600 million 2030 from the current level of 400 million has the potential to give a big boost to steel industry.
(The writer is an independent commentator on socio-economic and political issues. Views are his personal)