Admitting that profits of the state-owned corporation would be drastically down, Pande said,"Our profits will be down to about Rs 100 crore primarily owing to an substanial increase in depreciation and interest charges."

He, however, claimed that operational profits would be almost equal to those of 1996-97, "on account of nearly 7 per cent increase in sales volume and 2.5 per cent increase in net realisation."

Constrained by mounting input costs amidst stagnating demand and growing competition from private sector, SAIL's profits have been coming down ever since 1995-96, when net profits soared to Rs 1,319 crore. In 1996-97, profits dropped by 60 per cent to Rs 515 crore.

Explaining the decline in profits, Pande said demand growth for steel in the country dropped from 21 per cent in 1995-96 to nearly zero-level in the lastfinancial year.

Moreover, adverse market conditions prevented SAIL from resorting to a "much desired" price hike in 1997-98, the year in which corporation saved about Rs 700 crore from internal cost-effective measures, he added. On rebates being reportedly offered by steel producers to garner a share in the depressed market and clear inventory pileup, Pande said that increase of 2.5 per cent in net realisation was inclusive of everything.

Commenting on the dismal steel scenario, he said not only had government investments in core activities dried up during the year but also industry was confronted with cheaper imports from CIS countries and South Korea.

"We have taken up the issue of imports with the government for anti-dumping measures. But nothing has happened so far," he added.

The corporation also had to face the brunt of hike in input costs to the extent of about Rs 800 crore, Pande said and hoped that there would not be any increase in railway freight during the current financial year.

Pandeis expected to present the annual accounts to the SAIL board on May 29, the day on which the railway budget is scheduled to be presented in the Parliament.

Decrying repeated hike in coal prices by state-owned Coal India Ltd (CIL), which was eating into SAIL's profits, Pande said, "We have now reached an agreement with CIL whereby coal price increase will be limited to 5 per cent in an year."