Appreciating that the FIs would necessarily have to carry out due diligence for new projects awaiting appraisal, Basu, however, said that since the longer term projected demand for steel remained attainable, FIs funding for some more capacities in the long products category may be justified.

Basu pointed out that the IDBI's own review of the industry carried out last year had projected higher figures than those adoptedfor the Ninth Plan.According to a steel ministry release here on Friday, Basu in his communication said that there were 19 new major steel projects, representing aggregate capacity of around 13 million tonnes and a total investment commitment of over Rs 25,000 crore.

Of these, five were already operational, representing an incremental capacity of around 3.5 million tonnes. Eleven projects, of nearly nine million tonnes capacity, were under implementation and five more with proposed capacity of five million tonnes were awaiting financial appraisal.

According to Basu, all these facts showed that the steel sector had responded magnificently after its opening up Referring to the current slow-down in the steel sector, Basu said that these recent developments were temporary and necessarily short-term in nature. He said his department was confident that this trend would soon be reversed as the Government had already announced some major infrastructure investment and large scale construction activities.