House panel flays steel policy

Describing the National Steel Policy as not a structured one, a Parliamentary panel has said it is grossly inadequate...

Describing the National Steel Policy as not a structured one, a Parliamentary panel has said it is grossly inadequate in addressing the burning issues in the steel sector like grant or renewal of mining leases and securing environmental clearances, which could impede its growth.

8220;The Committee feel that NSP is not a well structured policy. NSP does not propose any concrete mechanism to address important issues such as problems faced in grant or renewal of mining leases and inordinate delay in obtaining environmental clearances etc which hamper the growth and development of steel industry,8221; the Parliamentary Committee on Public Undertakings said in its report.

It argued that all corporate plans and expansion plans of steel PSUs such as SAIL and RINL, which are being implemented in pursuance of the goals of NSP will be adversely affected if the difficulties are not addressed in the right earnest.

8220;The Committee are disappointed to find that NSP is too inadequate in addressing the burning issues.8221; As regards the delays in obtaining clearances, the Committee said though NSP proposes a single window clearance for large projects to be followed by statutory clearances by the ministries concerned, it does not clearly spell out a time frame within which clearances should be granted. Observing that mineral-rich states would recommend renewal of existing leases only against credible mining investment plans against a specified period, the Parliamentary panel said NSP has failed to spell out clear-cut modalities in this connection.

8220;The Committee are unsure whether the mineral-rich states would follow the guidelines of the Central government in a federal democratic set-up,8221; it said and suggested that the NSP should emphasise on creating a single-window mechanism for all the clearances and timely and adequate availability of steel and discouraging export of quality iron ore needed by domestic steel utilities. Steel production capacity in the country by the year 2012 will be nearly 124 million tonnes. India is expected to become the second largest steel-making nation in the world by 2015.

Meanwhile, the country8217;s crude steel production has grown at more than 10 annually from 34.71 MT in 2002-03 to 53.90 MT in the last fiscal while the production of finished steel stood at 55.27 MT during 2007-08 as against 40.71 MT in 2003-04. Sponge iron grew at a CAGR of 22 to reach a level of 18.35 MT in 2006-07 compared to 7.68 MT in 2002-03.

In tune with the NSP, state-run steel giants SAIL and RINL are in the midst of ambitious expansions to adopt the best technology and double their production capacities. SAIL8217;s Rs 54,000-crore expansion plan is expected to raise its capacity to 26.2 million tonnes per annum of crude steel production by 2010 while RINL8217;s expansion plan is expected to take its capacity to 6.3 million tonnes and is expected to be completed by February 2010 at an estimated cost of around Rs 9,000 crore.

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However, the Committee expressed concern over SAIL8217;s lower blast furnace productivity as compared to Tata Steel and RINL, ostensibly due to inferior iron ore content and higher impurities, and asked the PSU to bring it on a par with the others.

8226;India expected to become 2nd world8217;s largest steel-making nation by the year 2015

8226;The country8217;s crude steel production has grown at more than 10 annually from the 2002-03 figure of 34.71 MT to the last fiscal8217;s figure of 59.30 MT