Ministry sources today divulged that a recommendation to this effect was likely to be sent to the finance ministry. They, however, added that Sail's request for conversion of accumulated interest of about Rs 1200 crore on SDF loan into equity did not find favour with the ministry.

The ministry is inclined to recover this interest amount for development of research and development activities and small scale sector, in view of the Cabinet's decision to create a fund for the purpose.

When contacted steel secretary Ashok Basu said that ministry was looking into the revival package for SAIL but declined to give details. He, however, said the package would be cleared by next week for the consideration of finance ministry, Planning Commission and other concernedauthorities.

Expressing concern over the present slowdown in the steel sector, Basu said things were bound to improve in the coming months with the Centre giving fast-track clearance to the infrastructure projects.

Addressing a seminar on steel intensive construction Basu said the Indian steel sector was fundamentally strong but the recession in market especially slowdown in infrastructure sector has resulted in reduced offtake of the products.

There was a potential for steel demand to be increased especially in the construction industry but steel producers should adopt an aggressive marketing strategy for the purpose, he said.

If the proposed infrastructure projects are cleared, the steel demand in the construction sector will increase to 22 million tonnes from the current demand of about 14 million tonnes, Basu added. He said that ministry would propose a reduction in the excise duty in the next general budget to induce demand.

Earlier, Housing and Urban Development Corporation chairman, V Sureshsaid that at this time when the economy was going through a slag period, investment in housing and infrastructure would be the most efficient manner to kick start the economy.

This indeed is an opportune moment for the promoters of steel to step in and produce effective products which are improved in terms of quality and are cost effective in the long-term life of buildings.