Paswan calls upon steel producers to optimise production

New Delhi, Oct 4 (UNI) Steel Minister Ram Vilas Paswan today called upon the steel producers to keep a high level of operational discipline and achieve higher productivity to produce more steel through the existing capacities.

Addresing the 22nd Consumer Council meeting here, Mr Paswan said the steel producers should try to continue to price their products with a degree of responsibility and restraint.

He said steel is a universal intermediate and the inflationary pressure in the economy will intensify with rise in price of steel producers.

Mr Paswan appealed to the steel producers to pass on the benefits of a lower tax structure to the ultimate users of steel.

He said apart from augmentation of steel production capacities, one of the major focus areas is increasing the accessibility of steel for the common consumer.

In the past few years, the government has been trying to strengthen the delivery chain through its public sector units by openig rural stock points and strengthening the dealer network.

The Steel Minister said that according to the latest estimates the crude steel capacity in the country will reach a level of 124 million tonnes from 56 million tonnes in 2006-07.

The government has assumed a pro-active role in turning the intentions of the entreprenuers into actual capacity on the ground.

The various constraints in setting up new capacities are being thrashed out in a high level Inter-Ministerial Group which has been constituted under the chairmanship of Secretary (Steel), he said.

Mr Paswan, however, regretted that the mismatch in the rate of production and consumption of steel is a cause for concern.

While the growth in the production of steel has significantly slowed down to 5.2 per cent in 2007-08 after growing at 12.8 per cent in 2006-07, the first five months of the current financial year has seen a production growth of 4.2 per cent as compared to the corrresponding period last financial year.

The capacity in the large scale integrated sector is already operating at more than 100 per cent utilisation levels and it is heartening to note that the secondary manufacturers have stepped in to shore up the slack in supply, especially in the non-flat segment.

As a result of the overall mismatch in the growth of demand and domestic production of steel, the country has become net importers of steel in 2007-08 to the tune of 2.1 million tonnes. The same trend continues for April-August of this year too.

He said the other source of concern till recently has been the rise in price of steel and its raw materials, both domestic and international.

''It is happy to note that, steel prices have started to decline from August 2008 onwards, though incipient pressures till remain as raw material prices have not yet softened to the desired extent,'' he said.

UNI BKS MP CS1710