MUMBAI, January 30: The Union ministry of steel has upheld the ambitious projections made by units which have set up huge new steel capacities over the last few years, now hit by one of the worst ever recession. The ministry has noted that till November 1997, production has not matched the previous year's output.It has recommended, in a press note issued to notify a recent "round-table meet" with the steel industry representatives, that "what is happening today calls for a steady response for a long-term strategy". The ministry is aware that the producers decided to set up the new capacities on the basis of projections made on demand for steel in the Ninth Five Year Plan. These projections assumed that the economy would clock an approximately six per cent growth per annum.
Since then, industrial growth slipped (over the last 24 months) to less than 3.5 per cent per annum, and there are no signs of immediate recovery. Last year, the growth of gross domestic product was propped up by a spurt inagricultural growth, but on the whole, growth continues to be depressed, restraining steel demand.
The ministry felt that 1997 was a "mixed year" for the iron and steel industry. The high rates of growth witnessed during 1993-94 to 1995-96 seems to have slowed down. Till November 1997, reveals the ministry, production levels have not increased compared to the corresponding period in 1996-97, "be it steel, or pig iron or ferro alloys." While marketing of steel has been a problem and inventory levels less than comfortable, steel exports witnessed a rebound. The ministry recently organised a day-long event in New Delhi on January 29, which was attended by industry leaders and government officials. The meet was to chart out the future course of action and help to frame the agenda for 1998 and beyond.
Participants at the meeting comprised, other than bureaucrats, representatives from public sector giants such as Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, and MECON, and private sector majors(including leading consultancy firms) such as Tata Iron & Steel Company, Essar Steel, Ispat Industries, Jindal Vijaynagar Steel, Lloyds Steel, Mukand Ltd and Usha (India) Ltd among others.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
