Steel is backbone of Indian Economy. The word ‘Steel’ itself connotes strength and when we say that he is made of steel , means that he is a man of strength .Really, Steel plays pivotal role in the development process of any economy.That’s why Steel sector comes under the core sector of any economy. And it wouldn’t be an exaggeration when we say that “there is a bit of steel in everybody’s life.”

In India,the year 2005 saw many important developments in Steel Sector and the general mood and trend has been upward and positive.The year saw for the first time a National Steel Policy. In Public Sector enterprises(PSUs), the cabinet approved the merger of IISCO with SAIL, the cabinet also approved the expansion plan of Rashtriya Ispat Nigam Ltd., etc.The major achievements during 2005 can be summarized as follows-:

National Steel Policy.(NSP)- The NSP has been approved by the Cabinet on3rd November,2005. The Policy inter alia seeks to enhance the indigenous production to 110 million tones per annum by 2019-20 from the present level of 38 million tones, implying a compound annual growth rate of 7.3%. This requires additional investment of about Rs. 2,30,000 crores. This is expected to generate additional employment of around 1 million by 2020.

The basic objective is to ensure that India has a modern ,efficient and globally competitive steel industry of world standards catering to diversified steel demand..On the demand side, the Policy seeks to enhance steel usage at various levels of the economy.On the supply side , the Policy proposes to adopt measures for removing major supply side bottlenecks like improving the availability of critical raw materials.

The NSP also targets a per capita consumption level of about 165 kg. in Urban areas and 4 kg in rural areas by 2019-20 as compared to 77 kg and 2 kg respectively in 2004-05.The NSP seeks to mount aggressive R&D efforts to create manufacturing capabilities for special types of steel, substitute coking coal, use iron ore fines, develop new products suited to rural needs etc.

Finally, the NSP recognises the fact that integration of the Indian Steel industry with the global market requires that the industry should be protected from unfair trade practices, which become common especially during periods of downturn. The NSP, therefore, envisages institution of mechanisms for import surveillance, and monitoring export subsidies in other countries.

MERGER OF IISCO WITH SAIL.- In June , 2005, the Cabinet the proposal of the merger of Indian Iron and Steel Company(IISCO) with Steel Authority of India Limited(SAIL).The merger will bring together physical resources of IISCO and the financial , technological and managerial resources of SAIL. The SAIL is already preparing an ambitious , modernisation and expansion plan for IISCO.

EXPANSION OF VISAKHPATNAM STEEL PLANT- TheCabinet has approved the proposal for expansion of liquid steel production of Rastriya Ispat nigam Ltd. in October, 05 from 3 million tonnes to 6.3 million tonnes by 2007-08 at an estimated cost of Rs. 8,692 crores.

FDI IN STEEL SECTOR- With the upturn in the steel industry, the foreign companies/investors have started showing interest in the investment by way of investing in the existing company or in setting up of Greenfield steel projects. In addition to above, POSCO, South Korea has proposed to set up a 12 million tonne steel plant in the state of Orissa involving an investment of US$ 12 billion.Mittal Steel Company has also entered into a MoU with Government of Jharkhand for setting up a 12 million tonne steel plant involving an investment of US$ 9 billion.

STEEL AVAILABILITY, EXPORTS AND PRICING

The total production of finished steel during April-October, 2005 has been estimated to about 24.25 million tonnes as against the production of 22.85 million tonnes during the same period last year, showing an increase of 7.4%. The apparent consumption during the year has also gone up by 9.3% .

Export of the Steel during April-October, 2005 has been estimated to 2.8 million tonnes lower by 3.46% as compared to 2.57 million tonnes for the corresponding period last year. The lower level of export is due to domestic prices being higher on an average as compared to international prices.

The steel prices were hiked in September, 2005 for the first time since April-2005 . The hike, in the range of Rs. 500-1000 per tonne, followed reduction in steel price in June, July & August, 2005 and was mainly in the form of roll back on discounts/rebates

MERGER OF PSUS

Ministry of Steel as a part of modernisation and expansion of existing PSUs has set up an expert group during the year -2005 under the chairmanship of Shri B.L.Das, ex- Secretary (Steel) to evaluate the feasibility of various proposals for merger of PSUs . Expert Group will examine the proposal of merger of NINL with SAIL, merger of mining companies KIOCL with NMDC, merger of raw materials of supply of PSUs with Steel companies, merger of MSTC with FSNL.

CORPORATE PLAN OF SAIL

Corporate Plan of SAIL envisages an investment of Rs. 25,000 crores to upgrade the existing facilities and expansion of some of the units to ensure competitive edge and sustain viability of SAIL by 2012. Here the basic idea is to see that SAIL emerges as the largest steel producing company of the world.

With these measures and initiatives taken by the Ministry of Steel during the year 2005, the Steel sector in the country is set to move upward and overall scenario is positive with accelerated rate of growth in steel sector.