CHAIRMAN's DESK

" ... What is more important is to have a clear action plan that clearly delineates the steps necessary to reach the supply side figures, which flow from the targetted production ..."

The L.N. Mittal group has finally emerged as the largest steel maker in the world after its latest acquisition of the ISG group in the USA. We have been expecting this development for quite some time now and it is indeed creditable that within a span of a generation, Shri Laxmi Mittal has managed to attain such tremendous heights. Indeed, it appears that his model of growth is now being actively pursued by other major players both in India and abroad. Tata Steel has already finalized plans for expanding capacity up to 15 million tonnes per annum within 5-10 years largely through mergers and acquisitions. Ispat Industries Limited now claims to be larger than SAIL with a total capacity of 13 million tonnes, which has been managed through mergers and acquisitions in East Europe, Africa, etc. It appears that entrepreneurship in India is finally breaking home barriers to achieve its full potential. Questions have been raised as to why public sector undertakings such as SAIL cannot follow a similar PAT. Of capacity at home since it intends to raise its production to 20 million tonnes by 2012 from the existing level of 12 million tonnes. Perhaps, the public sector is more risk averse than the private sector. In any case, with the buoyancy in the industry at its peak, it is becoming increasingly difficult to pick up capacities both at home and abroad -at affordable prices.

At home we are given to understand that 30 million tonnes additional capacities have already been firmed up in Orissa state alone and MoUs signed by the state governments with the prospective entrepreneurs. Even if 50 per cent of this capacity actually fructifies and in addition 50 per cent of the expansion plans of Tata Steel, Vizag Steel and SAIL see the light of the day, we should be easily able to achieve the target of 60-65 million tonnes by 2012. The ministry is giving the utmost importance to its role of facilitating the setting up of such capacities in coordination with state governments and other ministries. Action is in hand to activate the project coordination group, which was set up to do hand holding of upcoming and last mile units.

The steel policy paper prepared by the Ministry has been sent to the committee of secretaries for initial level deliberations. The Ministry is preparing a consolidated position paper for consideration by the committee of secretaries and it is hoped that the overall policy will be adopted by the cabinet by the end of March, 2005. There has been much talk about the need for a steel policy given that the industry is decontrolled. In our opinion, a lot of negative sentiment, which has been generated, is misplaced because a coordinated road map is necessary for giving focus to the type of help which will be required to be provided by the government. What is more important is to have a clear action plan that clearly delineates the steps necessary to reach the supply side figures, which flow from the targetted production.

( J P Singh Joint Secretary, Ministry of Steel & Chairman, JPC)
(This is excerpted from JPC Bulletin October' 04)