The 4th edition of ‘India Steel 2019 – Exhibition & Conference’ is being organised by the Ministry of Steel, government of India along with the Federation of Indian Chambers of Commerce and Industry (FICCI) in Mumbai on January 22 to January 24.The annual steel exhibition and conference aims at developing a road map for the growth of the industry. With the theme ‘Balancing steel demand & supply dynamics: building a new India’, the event will highlight the current trends, developments, challenges and prospects of the steel industry. A Reverse Buyer Seller Meet (RBSM) with delegations from the CIS, Africa, SAARC, and the Middle East will be organised which will help the Indian exporters interact with their potential buyers from these countries and forge collaborations. More than 250 hosted buyers will participate and have pre-fixed B2B and B2G meetings.

Steel Minister Chaudhary Birender Singh on Thursday said that the upcoming goods and services tax (GST) regime is expected to give a boost to the sector.

FICCI has asked the centre to raise the import duty on all steel products to 25 per cent in the upcoming Budget, as demand slows down in China, the world's largest steel producer and consumer. With demand slowing down in China, it is dumping steel products in India at cheaper prices, the industry body said."Import duty on all steel products should be raised to 25 per cent in the Union Budget 2016-17. "As an interim measure, we suggest that the customs duty on all steel products be immediately increased to 15 per cent," the industry body said. It said the tariffs on both Long and Flat Products need to be increased to provide a level playing field to the domestic industry, which has been severely hit due to rising imports. Customs duty on import of Steel Long Products is 10 per cent and on Flat Products is 12.5 per cent.

Mr Vishnu Deo Sai, minister of state for mines, steel, labour and employment, said here today that with the huge targets set by the steel industry and the scale that India has already achieved, it has become necessary to operationalise a national-level institute dedicated for Indian steel industry.

Addressing the launch function of India Steel Expo 2015, to be held from 16 to 18 April 2015 in Mumbai, the minister said: “This institute should act as a nodal learning and knowledge dissemination point for enhancing skill development, technology enhancement, research and development and other technical efficiencies for the Indian steel manufacturers. The proposed institute should have expert guidance from existing national-level institutes such as IITs, IIMs and others. This institute should also be capable of guiding the domestic manufacturers on foreign collaborations.”

The Expo is being organised jointly by the ministry of steel and FICCI. Mr Sai said such a landmark show is not only going to put India among the top nations in terms of holding such conferences and exhibitions, but would also showcase Indian steel industry among the best in the world.

Mr SK Roongta, chairman, FICCI steel and non-ferrous metals committee, said steel forms the basic pillar for any country’s national development.

However, in the case of emerging countries like India it assumes a far greater importance; for all other sectors like infrastructure, construction, consumer durables and automotive are dependent on steel production for their inputs, he said.

The government is considering formation of a task force to achieve 300 million tonnes (MT) steel output target in next 10 years, besides setting up of a national institute for steel sector.

"For long we have been talking about 300 MTPA (Million Tonnes Per Annum) target for production by 2025... I recommend formation of a taskforce, comprising of representatives from each sphere of the Indian steel industry (be it public or private producer, raw material supplier, technology provider or a logistics firm)," Minister of State for Steel and Mines Vishnu Deo Sai said at FICCI's 'Steel Summit' here.

The minister further said that though there are many constituents in the eco-system that doubt the achievement of the target, "we, however, firmly believe that if we channelise our energies into the right direction, the target is very much achievable."

In order to achieve such huge targets, he said, it is necessary that all stakeholders join hands and rise above internal conflicts to work as one unit and head strongly towards the goal. He added that with such a target in foresight and the scale that has already been achieved, it is necessary that a national level institute dedicated to Indian steel industry becomes operational.

"This institute should act as a nodal learning and knowledge dissemination point for enhancing skill development, technology enhancement, research and development and other technical efficiencies for Indian steel manufacturers," he said.

The proposed institute should have expertised guidance from existing national level institutes like IITs, IIMs and others and it should also be capable of guiding the domestic manufacturers on foreign collaborations, he said. "I am sure such an institute would pave way for long-term exponential growth of the Indian steel industry," he added.

He said developing capabilities of Indian steel industry around modern day requirements is another area that he would like to touch upon.

The government is considering formation of a task force to achieve 300 million tonnes (MT) steel output target in next 10 years, besides setting up of a national institute for steel sector.

"For long we have been talking about 300 MTPA (Million Tonnes Per Annum) target for production by 2025... I recommend formation of a taskforce, comprising of representatives from each sphere of the Indian steel industry (be it public or private producer, raw material supplier, technology provider or a logistics firm)," Minister of State for Steel and Mines Vishnu Deo Sai said at FICCI's 'Steel Summit' here.

The minister further said that though there are many constituents in the eco-system that doubt the achievement of the target, "we, however, firmly believe that if we channelise our energies into the right direction, the target is very much achievable."

In order to achieve such huge targets, he said, it is necessary that all stakeholders join hands and rise above internal conflicts to work as one unit and head strongly towards the goal.

He added that with such a target in foresight and the scale that has already been achieved, it is necessary that a national level institute dedicated to Indian steel industry becomes operational.

"This institute should act as a nodal learning and knowledge dissemination point for enhancing skill development, technology enhancement, research and development and other technical efficiencies for Indian steel manufacturers," he said.

The proposed institute should have expertised guidance from existing national level institutes like IITs, IIMs and others and it should also be capable of guiding the domestic manufacturers on foreign collaborations, he said.

"I am sure such an institute would pave way for long-term exponential growth of the Indian steel industry," he added.

He said developing capabilities of Indian steel industry around modern day requirements is another area that he would like to touch upon.

"One such area is the Cold Rolled Grain Oriented... It is a critical input for the manufacturing of transformers which is key for generation, transmission and distribution of electricity to end-users," he said.

Only five global steel makers have the technology to produce such steel. India lags in this respect and dependent on imports to meet domestic requirements, he said.

"There have been some steps in the direction with the individual players but a concrete and dedicated output is yet to be achieved," he added.

Last year, it was decided in a high-level meeting that push will be given towards creating domestic manufacturing capabilities in advanced materials, alloys and composites and also treble the country's steel production capacity to 300 MT by 2025.

At present, the country's crude capacity for steel production is 96 MT per annum.

Seeking a rollback of the 2.5 per cent duty imposed on coking coal imports, domestic steel firms will try to impress upon the Finance Minister that there is shortage of the raw material in the country and the government should actually incentivise imports.

The steel makers will channelise their demand through one of the leading lobby groups such as FICCI and Assocham in the absence of any such industry organisation amongst themselves, head of a leading steel maker said on Sunday.

"All steel makers are on the same page on this issue and have taken a decision to urge the Finance Minister to consider rolling back the 2.5 per cent duty on coking coal imports. The imposition of import duty defies any logic," he said.

Surprising the steel industry, government levied the duty on imports of coking coal, a key steel making input, in the Budget from nil earlier. It requires 0.8 tonnes coking coal to produce one tonne of steel.

"In our country, coking coal is not adequately available and chances of the present situation prevailing for many more years. There is every possibility of a three-fold rise in the annual coking coal imports to 120 million tonnes (MT) in the next 10-12 years," he said.

India's steel making capacity is projected to go up to 300 mtpa by 2025 from around 100 mtpa now.

Steel makers' import around 40 million tonnes of coking coal per year. This is due to subdued and stagnant supply from state-run Coal India Ltd.

"When there is inadequate supply domestically, government should incentivise steel makers for importing the raw material and instead of that, it is levying import duty. This is not conducive for the industry," he said.

Roughly estimated, the duty hike would lead to a Rs 200 per tonne increase in the cost of steel production, he added.

The proposal had evoked sharp reaction from the domestic steel makers with some saying the move was "rather surprising and disappointing, given the shortage of metallurgical coal, in our country".

With imports of stainless steel flat products from China rising by around 500% in the last three years, industry body FICCI has urged the government to extend anti-dumping duty on flat stainless steel products to save the interest of domestic industry.

Flat products account for 70% of the domestic stainless steel market and India imports around one-third of its requirements.

The industry body has written a letter to the commerce ministry “to look into the matter and take necessary steps for extending anti-dumping duty provisions for all grades and widths of flat steel products from China”.

Earlier, India had imposed anti-dumping duty on imports of hot-rolled flat products of stainless steel from the European Union, South Africa, US and Taiwan, but excluded China.

“The stainless steel industry is going through a rough phase. We want the government to extend the anti-dumping duty from China or at least increase the basic import duty from current 5% to 7.5% to save the domestic industry from cheap imports,” said NC Mathur, president, Indian Stainless Steel Development Association.

India, ranks as the third largest consumer of stainless steel and is also world’s fourth largest producer. Domestic firms put in massive investments towards modernisation and capacity enhancement, hoping domestic growth would be in double-digit for another 5-6 years. “However, these investments are now in jeopardy because of widespread dumping of stainless steel flat products from China,” the letter said.

India had imposed anti-dumping duty on imports of cold-rolled flat products of stainless steel in the width range of 600 mm to 1,250 mm in 2010.

There is no duty below 600 mm and above 1,250 mm now and imports are coming in these width as they are outside the range of anti-dumping duty.

With Chinese imports rising, industry body FICCI has asked the commerce ministry to take immediate steps to extend anti-dumping provisions on imports of all stainless steel flat products.

Currently, it is imposed on 600-1250 mm category only.

In a letter to S R Rao, Secretary, ministry of commerce and industry, FICCI Director Arnab Kumar Hazra said a large scale of circumvention of anti-dumping duty is happening through imports in other shapes such as stainless steel circles and outside the range of 600-1250 mm.

The circumvention trends are mostly from China from where imports of stainless steel flat products grew by 486% from 2013-14 at 14209 MT from 2009-10 at 14209 MT.

The scenario is hurting domestic industry which has both capability and capacity to supply cold rolled stainless steel flat products in complete width range of 0-1650mm.

Flat products account for 70% of the total steel market. Currently, India is the fourth largest producer and third largest consumer of stainless steel in the world.

The steel ministry has invited suggestions from industry bodies including FICCI, CII and Assocham on duty structures for submitting them to the finance ministry for the 2013-14 Budget.

'Ministry of Steel has initiated exercise for preparing the proposal for the union budget 2013-14. In this connection, it is requested that your proposals/ suggestions for making changes in the existing duty structure...,' the steel ministry has recently written to 19 associations.

As on 3 September, tinplates and defective cold-rolled coils attract the highest import duty at 10 per cent. A clutch of other items including Hot-Rolled sheets, coils and CR coils and sheets attract 7.5 per cent duty. Import duty on iron ore stands at 2.5 per cent. The steel ministry has asked industry to send views on changes in the procedural rules pertaining to direct/indirect taxation by 19 October and strictly adhere to the time-line so that the revenue department gets sufficient time to consider the proposal before finalising the Budget.

The Steel Ministry has invited suggestions from industry bodies including FICCI, CII and Assocham on duty structures for submitting them to the Finance Ministry for the 2013-14 Budget.

"Ministry of Steel has initiated exercise for preparing the proposal for the Union Budget 2013-14. In this connection, it is requested that your proposals/ suggestions for making changes in the existing duty structure," the Steel Ministry wrote to 19 associations.

As on September 3, tinplates and defective cold-rolled coils attracted the highest import duty at 10%. A clutch of other items including hot-rolled sheets, coils and CR coils and sheets attract 7.5% duty. Import duty on iron ore stands at 2.5%.

The Steel Ministry has asked industry to send views on changes in the procedural rules pertaining to direct/indirect taxation by October 19.

India's steel imports grew by 40% year-on-year in the first quarter, keeping domestic production growth at low levels.

Growth in steel imports was driven largely by the fact that the landed cost of imported steel was still cheaper than domestic steel despite increased import duty on hot rolled coils, according to a recent ICRA report.

"While proposing any change in the duty structure, the detailed financial implication of such a change may kindly be worked out. And also the current level of import and demand in the domestic industry," the Steel Ministry's letter said.

Union Steel Minister Virbhadra Singh on Tuesday announced that the Steel Ministry proposed to take up more UNDP-sponsored projects for reducing greenhouse gas emissions in steel re-rolling mills.

Addressing the national conference on “Improving energy efficiency in Indian secondary steel sector including steel re-rolling mills” organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with UNDP (United Nations Development Programme) here, Mr. Singh said all public sector steel companies have been advised to set energy efficiency and emission reduction as a key parameter in their modernisation and expansion programmes.

He urged the industry to come up with more research-based projects in the integrated steel sector and large scale steel plants. “Since India is becoming the fastest growing steel producing and consuming country in the world, time has now come for developing world-class steel technology in India and exporting it to other countries,” he said.

He said that the Global Environment Facility (GEF) of UNDP aimed at energy efficiency, quality improvement, work reduction, improvement in the level of awareness, training of technical personnel and supporting the industry towards efficiency, productivity and profitability.

P. K. Mishra, Secretary, Ministry of Steel, said the Ministry was working on innovative aspects of the GEF project such as benchmarking of energy-efficient technological packages, strengthening of institutional arrangements and third-party financing under energy servicing company. So far, the Government has identified 40 model units and the search for more model units is on.

Caitlin Wiesen-Antin, Country Director, UNDP India, pointed out that energy efficiency was a critical response to climate change mitigation, energy security and sustaining growth.

At present, the UNDP project in India covered 50 re-rolling mills. The project carries out energy audit, encourages the use of best practices and energy efficiency technologies.

South Korean steel giant Posco and state-run SAIL are likely to come out with the detailed project report for jointly setting up a 1.5 million tonne per annum steel plant in Bokaro, Jharkhand in a month's time, a top government official said today. "Some discussions have been carried out and we are in the process of preparing a detailed project report (DPR) which will establish the techno-economic feasibility of the project. It will take roughly a month (to prepare the DPR)," said P K Mishra, Steel Secretary. He was speaking to reporters here on the sidelines of a FICCI conference. Mishra said all other decisions including the issue of having an equal stake for both the companies will be taken only after the DPR is prepared.

The Steel Secretary, Mr P.K. Misra, said on Tuesday that the Ministry is not in favour of hiking import duty of steel to tackle the problem of cheap imports.

Speaking at a FICCI steel summit, Mr Misra said, “By putting artificial barriers for imports the consumer will suffer. The industry should build up capacity to stop the imports.”

He added that imports have also gone up because of the gap between supply and demand. “While steel consumption this year has grown by 9.7 per cent, the production has only grown by 2.7 per cent. We are not in favour of creating artificial barriers for import,” said the Steel Secretary.

On the issue of acquiring coking coal blocks abroad, Mr Misra said that the International Coal Ventures Ltd (ICVL) is looking at three to four properties in the US, Australia and Indonesia and there might be some acquisitions in the next six months. ICVL is a joint venture between SAIL, Coal India, NTPC, Rashtriya Ispat Nigam Ltd and NMDC. It was formed to acquire coking coal blocks outside India.

SAIL FPO

Meanwhile, encouraged by the strong market conditions, Mr Misra said the Government might chose to fast track the SAIL follow-on public offer (FPO) and launch it before the end of the current calendar year.

“Market conditions are buoyant. If it remains like this, we may consider advancing SAIL FPO in the calendar year 2010,” he said adding that there were still some modalities left to be completed.

Mr Misra also said that the SAIL-Posco joint venture is slated to be completed before the end of the calendar year.

Government may advance 8,000-crore SAIL follow-on public offer (FPO) to get maximum benefit from the buoyant market. The market offer, under which the government will divest 5% of its stake, while the steel major will issue additional shares equivalent to 5% stake, may now be launched by December this year instead of January-February next year.

“Market conditions are buoyant. If it remains like this, we may consider advancing SAIL FPO in the calendar year 2010,” steel secretary Pradeep Kumar Misra told reporters on the sidelines of FICCI steel summit.

The proposed FPO of SAIL was earlier slotted for a November launch but due to few procedural issues it was postponed till early 2011. SAIL still has to complete appointment of requisite number of independent directors as per Sebi guidelines. Besides, the government is restructuring its board to reduce the number of functional directors.

“All these things are taking more time than anticipated,” said another official of the steel ministry asking not to be named. SAIL has already shortlisted six bankers, including JP Morgan and Deutsche Bank, for managing the first phase of its upcoming FPO. SBI Capital, Enam Securities, Kotak Mahindra Capital and HSBC are the other bankers for the FPO.

The banks will manage the first phase of its 20% share sale programme. Only 10% shares would be offered in each phase. The second phase, similar to the existing one, may be launched sometime during next financial year. At present, the government holds a little over 85% in SAIL and post-FPO, its equity in the company is expected to go down to about 69%.

Jindal Steel and Power Ltd (JSPL) said on Tuesday that it is investing Rs 44,000 crore as part of its expansion plans for setting up two 6- million-tonnes-per-annum steel plants in Orissa and Jharkhand.

The first phase of JSPL's Rs 23,000-crore-tonne steel plant in Angul, Orissa, will be commissioned by the end of 2011, but it is still awaiting the allocation of iron ore mines in the State.

“As of now, we have only been given non-coking coal mines for the plant. But we will be using coal gasification technology for the plant; so non-coking coal mines will suffice. We are yet to get iron ore mines in Orissa even though we have fulfilled all the conditions of the memorandum of understanding for allocation of mines. We hope the State government will now take some steps,” said Mr Anand Goel, Joint Managing Director, Jindal Steel and Power Ltd, at the sidelines of a FICCI steel summit.

For the Rs 21,000-crore steel plant in Jharkhand, JSPL has been given a small iron ore mine in the State, said Mr Goel. The first phase of the Jharkhand project with a capacity of 3 million tonne per annum is expected to be completed by the middle of 2012.

Land acquisition for both the projects has been completed with 5,000 acre of land at Angul in Orissa and 3,000 acre of land in Jharkhand.

“Financial closure for the Angul project has been achieved and the same would be achieved for the Jharkhand plant soon,” he added.

International Projects

The company also plans to build a 6-million-tonne-per-annum sponge iron plant and 10-million-tonne-per-annum pellet plant in Bolivia.

Last month, the company said it has been allocated 3,000 acre more land in Bolivia, which will allow it to proceed with its steel and pellet projects.

Also on the international front, JSPL is looking at raw material resources.

The rising share of steel imports in India's domestic consumption and the widening trade deficit in steel has become a cause of serious concern for domestic industry which has witnessed an increase of over 66% in imports in the first four months of 2010-11, industry body FICCI has noted in its analysis on steel imports.

FICCI observed in its analysis that India's steel trade deficit for the first four months of 2010-11 (April-July) is already 66% of the trade deficit in steel for the full year 2009-10. This is on top of the three times increase in steel trade deficit in 2009-10 over 2008-09. FICCI said that while steel exports for April-July 2010-11 have fallen 11%. Our imports have increased by more than 66% vis-a-vis same period last year.

In the FICCI Steel Committee meeting held last month, members had expressed concern over the increasing share of steel imports in domestic consumption. Share of steel imports in India's steel market has more than doubled from around 6% in 2004-05 to 13% in 2009-10. However, July 2010 has seen the share of imports in Indian steel market rising to over 22% from 16% in April 2010, noted FICCI. India, which used to be a net exporter of finished steel till 2006-07, has become net importer since 2007-08. Moreover, this gap is widening further as there is a sharp increase in imports which have risen from 667 million tonnes in April 2010 to 1288 million tonnes in July 2010, an increase of more than 93% in last 3 months, observed FICCI.

To bridge the trade gap, FICCI has suggested that government needs to further incentivise the steel exports through targeted measures like Focus Market Scheme which provides 3% duty free credit scrips for exports to select markets.

FICCI also urges the government to be alert on unfair trade practices of exporting countries and use appropriate trade remedial measures wherever required to check any harmful surge in imports.

FICCI said that there are some segments in steel that have experienced huge surge in imports and need immediate attention. For instance, imports of HR strips have remained consistently high for past 4 months by touching a level of 1.6 million tonnes in the period April-July 2010.

Imports in this category for the full year of 2009-10 were 3.2 million tonnes implying that in the first four months of 2010-11 imports have already crossed 50% of imports of previous year under this category, observed FICCI.

Ahead of the announcement of the annual foreign trade policy, industry body FICCI today demanded an additional three per cent duty sop for steel exporters to bridge the rising trade gap.

"In order to bridge the trade gap, the government needs to give further incentives to steel exports through measures like Focus Market Scheme, which provides 3 per cent duty free credit scrips for exports to select markets," it said.

India that used to be a net exporter of finished steel till 2006-07 has become net importer since 2007-08. In 2009-10 the deficit reached 4.06 million tonnes, about three times over the previous year, it said.

Steel exports in April-July 2010-11 declined by 11 per cent year-on-year, while imports went up by over 66 per cent.

Commerce and Industry Minister Anand Sharma, on Monday, is likely to announce fiscal benefits to exporters in the supplement to the Foreign Trade Policy 2009-2014, amid fears of demand slowdown in India's traditional markets.

Steel exporters get duty benefit of three to eight per cent under DEPB scheme, which aims at neutralising the incidence of duty on the inputs used in products for exports.

FICCI said that the rising share of steel imports in India's domestic consumption and the widening trade deficit in steel has become a cause of serious concern for domestic industry.

It further said the share of domestic producers in the total consumption of steel in the country has declined over the years. While share of imports has increased from 6.13 per cent in 2004-05 to 12.9 per cent in 2009-10.

FICCI said the government should set up a taskforce under Steel Minister Virbhadra Singh to look into the reasons for inadequate growth of domestic steel production vis-à-vis consumption in the country.

It also said that in view of the rising share of imports in domestic market, the government needs to be alert to unfair practices of dumping and subsidised imports.

Union Steel Minister Virbhadra Singh on Wednesday demanded raising of export duty on iron ore in an effort to rein in the spiralling prices and increase domestic availability of the product.

Addressing a conference on “Challenges for Indian steel industry in infrastructure and resources” organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here, Mr. Singh said apart from the option of raising the export duty, quantitative restrictions on exports could be imposed, it said. “The government will have to look at the question of iron ore exports differently by bringing in definite deterrence. This may be in the form of either prohibitive duty or quantitative restrictions,” he said.

At present, iron ore lumps attract an export duty of 15 per cent and iron ore fines a duty of 5 per cent. ``The government recently had taken a few policy measures to discourage avoidable exports of iron ore and consequently raised domestic availability by increasing the export duty on lump ores to 15 per cent,” the Steel Minister said.

He said in order to ensure supply of vital inputs for steel like iron ore and coking coal, the Ministry was in close contact with the Ministry of Mines in formulating a new Mining Policy. A new Mining Policy Bill will be presented for Parliamentary approval soon. Iron ore and coking coal prices have surged as much as 90 per cent compared to the year-ago period, adding to the input cost of steel makers.

Mr. Singh regretted that Indian companies, particularly those in the public sector, had lagged behind in investment in mining assets as they possibly woke up later to the harsh reality that supply of coking coal could take such a dimension. “It is time for the Indian steel and mining companies, whether in the public or private sector, to look for opportunities overseas more seriously,” he said. Steel Secretary Atul Chaturvedi said land acquisition for steel projects continued to pose a major challenge and asked industry players to consider using the large land mass that was now available with the closed units. “I have asked the Ministry of Heavy Industry to map out such land masses and put the information on their website for the benefit of prospective investors. I hope FICCI will coordinate with the Ministry of Heavy Industry to take the process forward,” he said.

The steel ministry on Wednesday asked for a hike in duty and quantitative restrictions on the export of iron ore to increase domestic availability of the mineral and contain its shooting price.

"The government will have to look at the question of exports (of iron ore) differently by bringing in definite deterrence. This may be in the form of either prohibitive duty or quantitative restrictions," steel minister Virbhadra Singh said during a summit organised by FICCI.

Singh said his ministry is in close parleys with the mines ministry on the formulation of a new mining policy to facilitate supply of vital inputs for steel like iron ore and coking coal. A new Mining Policy Bill will be tabled in Parliament, he said.

The remarks came in the wake of supply bottlenecks in global markets and strong demand from China and India, especially for minerals of Australian origin. Iron ore and coking coal prices have surged as much as 90% compared to the year-ago period, adding to the input cost of steel makers. At present, iron ore lumps attract an export duty of 15% and iron ore fines 5%.

Singh said Indian companies, particularly those in the public sector, had lagged behind in investment in mining assets as "they possibly woke up later to the harsh reality that supply of coking coal could take such a dimension. It is time for the Indian steel and mining companies, whether in the public or private sector, to look for opportunities overseas more seriously."

Calling for creation of a war chest for “big ticket” buyouts of mines abroad, State-owned Steel Authority of India (SAIL) on Wednesday floated the idea of combining the resources of all the industry players. “There are 4-5 big players in the domestic steel industry. I think, now, if they can come together to create a big war chest we can go for big ticket acquisition of resources which are not available in the country. In the long-run, it is in the interest of the industry,” SAIL Chairman S K Roongta said on the sidelines of a FICCI-organised Steel Summit. Roongta, who is also the head of the special purpose vehicle (SPV) created by the Government for such acquisitions --International Coal Ventures Ltd (ICVL), said that steel firms should optimise the use of vital steel making inputs iron ore and coking coal. ICVL-- which is a consortium comprising top PSUs NTPC, SAIL, Coal India, NMDC and RINL, since its inception in 2008, has not met with any success in acquiring coking coal assets abroad. Private steel firms too are scouting for such resources in countries like South Africa, Indonesia and Australia among others to reduce their dependence on expensive imports and cut their input cost.

Slowdown in investments coming into the steel sector has forced the Steel Ministry to push back to 2012-13 the target date to achieve 124 million tonnes a year domestic steel production capacity.

“The time-frame to achieve the target of 124 mtpa domestic steel production capacity would now be 2012-13, this is due to some slow down in investments last year because of the recession,” said the Steel Secretary, Mr Atul Chaturvedi.

Mr Chaturvedi, however, added that investments have now picked up again and the production target could be achieved with an error margin of 5-8 per cent.

“I personally feel that with an error margin of 5-8 per cent we should be able to achieve the target of 124 mtpa production capacity.

“The investments have now picked up and the industry has come out of recession; so we expect there might be some slippage in time but we are hopeful that by 2012-13 the target would be achieved fully.”

Current capacity

The current steel production capacity in the country is 62 mtpa, including public and private sector units. The Steel Ministry had earlier envisioned doubling the production capacity by 2011-12 and for this purpose, a number of brownfield and greenfield expansion projects had begun.

Expansion projects

Regarding the progress of these projects, Mr Chaturvedi said, “Majority of the brownfield expansions are on track. Some greenfield projects were also factored into the 124 mtpa target and except for one or two projects, the rest are on track. By the end of the calendar year 2010, we might go up from current 62 mtpa production capacity and add another 5-6 mtpa capacity. Rashtirya Ispat Nigam Ltd's expansion projects would be completed by the end of the year.”

To deal with the land acquisition problems for greenfield projects, Mr Chaturvedi called on the industry bodies to work with the Government and identify where land is available.

Acquired Land

“The Central Government and various State governments had established a number of production units for which land was acquired. Not all of them are operating and a number of them are closed.

“I have suggested that some central body such as FICCI or CII in collaboration with the Government should prepare an inventory of such lands which were acquired for something else but are now lying almost logged up. These land vary from 100 acres to 1,000s of acres and can be put to use.”

The proposal for offloading a 20 % stake in the country’s largest steel maker the Steel Authority of India Ltd (SAIL) is likely to be put before the Cabinet by mid-January. “The 20% share sale proposal of SAIL will be moved before the Cabinet in the next three-four weeks,” steel secretary Atul Chaturvedi said on Thursday on the sidelines of FICCI steel summit. He said the draft proposal has already been approved by the steel ministry and has been sent to different ministries for comments. The government is considering a two-phase follow-on-public offer of the navratna firm. The divestment could fetch the Centre over Rs 9,000 crore going by the current market value. The government at present holds a little over 85% stake in the steel major.

Additionally, the ministry of steel has decided to come out with a white paper on the logistics requirement of the steel industry to reach a production capacity of 250-300 million tonne. The exercise was prompted by the current raw materials related constraints that the industry is facing. Chaturvedi emphasized the need for mineral mapping and assessing the availability of raw materials for steel production.

The steel secretary said that while land acquisition issue was hypersensitive, it was important for industry to conduct scientific mapping of the availability of sites for putting up steel plants and raw material prospecting and stressed the urgent need for creation of land banks for the purpose. Chaturvedi said the fertilizer industry had 1,800 acre which the steel and mining industry could use.

The proposal for disinvestment in the country's largest steel producer Steel Authority of India Ltd (SAIL) is set to reach the Cabinet within a month.

Mr Atul Chaturvedi, Secretary, Ministry of Steel, said on Thursday, “The proposal would take another 3-4 weeks to be moved to the Cabinet Committee of Economic Affairs.”

Mr Chaturvedi, speaking at the sidelines of a FICCI (Federation of Indian Chambers of Commerce and Industry) conference declined to comment on whether the disinvestment process would be completed this year.

“Completion of the disinvestment of SAIL would depend on the market conditions. NMDC (National Minerals Development Corporation) has been done, some others are being done by the Department of Disinvestment so we do not want to crowd all the proposals together so the timing would be decided separately, first we need to have a decision,” he said. The Steel Secretary added that the draft proposal has been prepared and has been sent to different ministries for consultations and comments.

The Government plans to raise Rs 16,000 crore from the sale of around 10 per cent Government equity in SAIL as well as a fresh issue of shares of the same amount.

Regarding land acquisition issues affecting the progress of Posco and Arcelor Mittal's proposed plants,

Mr Chaturvedi said land acquisition cannot be steam rolled, “We can take up separate issues with States and the concerned people, but land acquisitions cannot be done by force.

“There has to be a public opinion in your favour and people should see you as a party which would improve their lives to make it easer to acquire land.”

A 20 per cent share sale proposal in PSU steel maker SAIL will be taken to the Cabinet by mid-January next year, steel secretary Mr Atul Chaturvedi said today.

“The 20 per cent share sale proposal of SAIL will be moved to the Cabinet in next three-four weeks,” he told reporters on the sidelines of a FICCI steel summit here.

He said the draft proposal, that had been approved by the steel ministry, had now been sent to different ministries for comments.

The share sale programme for the country's largest steel maker will see the government offload 10 per cent stake in the company and SAIL coming out with a public offer in the same proportion in two phases. The government at present holds a little over 85 per cent stake in the steel major and plans to mop up about Rs 9,000 crore based on SAIL's share price, from the proposed disinvestment.

Meanwhile, SAIL JSW, Essar and Bhushan Steel may hike prices next month to cash in on the demand surge in domestic markets.

The country's second largest steel producer JSW Steel today joined others in the industry gunning for a price hike in January. "Internationally, steel prices have improved by about $30 a tonne (to $450 a tonne) in the past one month. There is a possibility of JSW increasing its prices," JSw Steel director (Sales and Marketing) Jayant Acharya told reporters here.

The steel ministry has put the disinvestment process of Steel Authority of India (SAIL) on the fast track by seeking Cabinet approval for sale of 20% share in the state-owned steel maker by mid-January next year.

“The disinvestment proposal of SAIL will be moved to the Cabinet in three to four weeks. We are in the process of finalising a Cabinet note on the matter,” steel secretary Atul Chaturvedi told reporters on the sidelines of the FICCI steel summit on Thursday.

He said the draft proposal, after being approved by the steel ministry, has now been sent to different ministries for comments. “The public offer may be launched at the opportune time. Though we would like to complete it this year, the processes and clearances are likely to push it to next financial year,” Mr Chaturvedi told ET.

The public offer by SAIL envisages the government offloading 10% its stake in the company and the company raising 10% through fresh equity in two phases, 5% each by the government and the company.

At the current market price, SAIL could mobilise close to Rs 18,000 from the market. SAIL shares closed 0.75% higher at Rs 212.95 on the Bombay Stock Exchange on Thursday.

The government at present holds a little over 85% stake in the steel major. The funds from issue of fresh shares will be used to partly finance Rs 70,000-crore expansion project.

Minerals major NMDC, another PSU under the steel ministry, is also likely to tap the markets. The government has already approved 8.38% stakesale proposal of iron ore producer NMDC and the disinvestment department has initiated the process for the same.

Besides, the steel ministry has also given approval to divest 10% of government’s stake in Nagpur-based Manganese Ore.

SAIL has an ambitious expansion programme involving investment of over Rs 70,000 crore to raise hot metal capacity from 15 million tonne to 23 million tonne by 2013 and further to 26 million tonne over next couple of years. Till 2008-09, the company funded its expansion through internal accruals. This year (2009-10), however, SAIL proposes to borrow close to Rs 6,000 crore to fund its over Rs 10,000 crore capital expenditure programme.

The government is not inclined to intervene if steel companies raise prices, Steel Secretary Atul Chaturvedi has said. “If prices can go down, they can rise also. We have no immediate plans to intervene in pricing,” Chaturvedi told reporters on the sidelines of the Federation of Indian Chambers of Commerce and Industry (FICCI) Steel Summit here.

Domestic steel companies plan to raise prices next month by 5-6 per cent. Earlier this quarter, most companies had cut prices 4-5 per cent. The rise is planned on the back of a buoyant demand and the expected increase in prices of iron ore and coking coal, when purchase contracts come up for renewal in January.

“International prices have gone up, so it’s likely that domestic prices will also go up next month,” SK Roongta, chairman of country’s biggest steel producer SAIL told reporters here.

Steel Authority of India (SAIL) is headed for disinvestment. A 20 per cent share sale proposal in the PSU steel major will be taken to the Union cabinet by January 2010, steel secretary Atul Chaturvedi said on Thursday.

“The proposal will be moved to the cabinet in the next 3-4 weeks," he told reporters at a FICCI conference.

He said the draft proposal that has been approved by the steel ministry has now been sent to concerned ministries for comments. As per the proposal, government will offload 10 per cent stake in the company and SAIL will come out with a public offer in the same proportion, in two phases.

Another official in the ministry told Financial Chronicle that the proposal would adhere to all standard formulations, including Sebi guidelines.

The government holds over 85 per cent stake in the country's largest steel company and plans to raise Rs 9,000 crore based on SAIL's share price from the proposed disinvestment.

Meanwhile, operating like a cartel, leading steel companies like SAIL, JSW Steel, Essar and Bhushan Steel may hike prices next month to cash in on the demand surge in domestic markets. "Internationally, steel prices have risen by about $30 a tonne to $ 450 a tonne in the past one month. There is a possibility of JSW Steel increasing its prices,'' JSW steel director Jayant Acharya said.

Steel prices were cut by about Rs 2,000 a tonne in the past two months following a fall in global prices and threat from cheaper imports. Bhushan Steel on Wednesday had let it be known that prices could increase by Rs 500-1,500, even as steel makers have generally been cagey in confirming the quantum of the hike.

SAIL chairman S K Roongta too concurred that prices are likely to be increased in January 2010.

When asked, steel secretary Chaturvedi said the government had no immediate plans to intervene if steel producers acted like a cartel. "If prices can go down, they can go up. We have no plans of intervening at the moment. We will see when the situation warrants," he said.

Despite the likelihood of steel prices increasing in January, the Government said on Thursday that it is far too early to interfere in steel prices.

The Steel Secretary, Mr Atul Chaturvedi, said on Thursday, “Inflation is more of a concern for food products. Steel prices have been cut during the last two months. If they can go down, then they can go up also. It has not reached a stage where there is a reason for concern, so we have not intervened and we have no immediate plans of intervening as well.” Mr Chaturvedi was speaking at a steel summit organised by FICCI here.

Speaking on the sidelines of the event, Mr S.K. Roongta, Chairman, Steel Authority of India Ltd (SAIL), said steel prices are likely to go up next month, “Internationally, prices have gone up so it is likely that domestic prices would also go up in January.”

JSW Steel's Mr Jayant Acharya, Director (Sales and Marketing), also hinted at a likely increase in prices from January.

He said that internationally prices had bottomed out and steel prices in the country should start to increase from January.

Mr Acharya, however, added that the company had cut prices of flat products by Rs 500 a tonne in December.

A 20 per cent share sale proposal in PSU steel maker SAIL will be taken to the Cabinet by mid-January next year, Steel Secretary Atul Chaturvedi said on Thursday.

"The 20 per cent share sale proposal of SAIL will be moved to the Cabinet in next 3-4 weeks," he told reporters on the sidelines of the FICCI Steel Summit here.

He said the draft proposal that has been approved by the Steel Ministry and has now been sent to different ministries for comments.

The share sale programme for the country's largest steel maker will see the Government offload 10 per cent stake in the company and SAIL coming out with a public offer in the same proportion, in two phases.

A 20 per cent share sale proposal in PSU steel maker SAIL will be taken to the Cabinet by mid-January next year, steel secretary Mr Atul Chaturvedi said today.

“The 20 per cent share sale proposal of SAIL will be moved to the Cabinet in next three-four weeks,” he told reporters on the sidelines of a FICCI steel summit here.

He said the draft proposal, that had been approved by the steel ministry, had now been sent to different ministries for comments.

The share sale programme for the country's largest steel maker will see the government offload 10 per cent stake in the company and SAIL coming out with a public offer in the same proportion in two phases.

The government at present holds a little over 85 per cent stake in the steel major and plans to mop up about Rs 9,000 crore based on SAIL's share price, from the proposed disinvestment.

Steel Authority of India is expected to raise about Rs 9,000 crore from the share sale plan. The funds will be used partly to finance Rs 70,000-crore expansion project of the company.

SAIL shares closed 0.75 per cent higher at Rs 212.95 on the Bombay Stock Exchange today.

With the proposal going to the Cabinet only in January, Mr Chaturvedi said the follow-on public offer was not expected in the current financial year.

The government has already approved 8.38 per cent stake sale proposal of iron ore producer NMDC and the disinvestment department has initiated the process for the same.

Besides, the steel ministry has also given approval to divest 10 per cent of government's stake in Nagpur-based Manganese Ore India Ltd.

The country’s largest steel maker SAIL said on Friday that steel prices are unlikely to go up in November.

Speaking on the sidelines of a FICCI conference on Diversifying and Enhancing India’s Steel Consumption, Mr S.K. Roongta, Chairman, SAIL, said, “Let’s wait and see what happens in November, but it is unlikely that steel prices would go up.”

Mr Roongta, while delivering his address at the conference, said that the domestic steel consumption in 2009 is likely to grow by 9 per cent.

Focus on rural sectors

Earlier, while delivering his inaugural address, the Minister of Steel, Mr Virbhadra Singh, urged the industry to let steel be available at affordable prices in order to boost consumption in the semi-urban and rural areas.

“One of the major reasons for our low per capita steel consumption is the lack of focus on vast rural sectors. For steel to be acceptable, in preference to other replacements, the common man must find that it is affordable and is cost effective. In this regard, the stability of price of steel in the market plays an important role, steel producers must keep this aspect in mind,” said Mr Singh.

Survey on consumption

The Minister also announced the decision to launch a nationwide survey on rural steel consumption and demand to correctly assess the rural steel consumption. “As per the last survey carried out five-six years ago, the per capita steel consumption in rural sector used to be two kg per annum. Though there has been some improvement, there is an urgent need for a large scale improvement in rural steel consumption,” said Mr Singh.

The new survey will be conducted by the Joint Plant Committee and cover nearly 300 districts and 1,500 villages. “The survey will orient our strategy for an accelerated steel consumption growth in rural India,” said the Minister.

Mr Singh also urged the industry to focus on improving distribution in the remote and rural areas. “If steel items of mass consumption were easily available in the villages then people would not have gone in favour of wood, cement or stone for construction material,” he said.

The government on Friday said it would launch a survey to assess per capita steel consumption in rural India. “In order to correctly assess the rural steel consumption, we have decided to launch a nationwide survey on ‘Rural Steel Consumption and Demand’,” steel minister Virbhadra Singh told reporters here on the sidelines of a steel summit organised by FICCI.

The survey, to be conducted by the Joint-Plant Committee (JPC) of the steel ministry, will cover 300 districts and 1,500 villages across the country, he said. The last survey was carried out about 5-6 years ago when per capital steel consumption in rural areas was 2 kg. “There is definitely some improvement over the last 2-3 years, considering that a large number of infrastructure and rural housing projects have been taken up under various schemes of the government,” he added.

India’s steel consumption rose by 5.7% to 26.49 million tonnes in the first six months of the current fiscal over the same period a year ago.

The steel ministry plans to launch a countrywide survey on rural steel consumption and demand to accurately assess the consumption pattern of steel in rural India. ‘‘This survey will cover all the states and union territories covering nearly 300 districts and 1,500 villages in the country,’’ said steel minister Virbhadra Singh on Friday.

The minister said that the consumption of steel in rural areas remains quite low despite a modest rise in last two to three years.

‘‘The survey conducted by the joint plant committee will reveal a true picture of steel consumption pattern and the potential demand, covering all socio-economic and geographical entities of the country,’’ he added at a FICCI conference.

Based on this results of the survey, the steel ministry will orient its strategy for an accelerated steel consumption growth in rural India. “This will also be in concurrence with the government’s programme for a vibrant and developing Gramin Bharat,” Singh said.

The Union Ministry of Steel will launch a national survey soon to assess the per capita steel consumption of rural India covering around 300 districts and 1,500 villages.

Inaugurating a conference on ‘Diversifying and enhancing India’s steel consumption,’ organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here on Friday, Steel Minister Virbhadra Singh said a nation-wide survey on ‘rural steel consumption and demand’ would be conducted by the Joint-Plant Committee (JPC) of his Ministry. The last survey was carried out about 5-6 years ago when the per capita steel consumption in countryside was 2 kg.

“There is definitely some improvement over the last 2-3 years, considering that a large number of infrastructure and rural housing projects have been taken up under various schemes of the government,” Mr. Singh added.

India’s steel consumption rose by 5.7 per cent to 26.49 million tonnes in the first six months of the current fiscal over the same period a year ago. The World Steel Association expects the country’s steel demand to grow by about nine per cent in 2009. “If this growth is sustained, our per capita steel consumption will cross 100 kg by 2015 from 47 kg at present,” Mr. Singh said.

Mr. Singh said based on the survey findings, the Ministry would orient a strategy for an accelerated steel consumption growth in rural India in concurrence with the government’s programme for a vibrant and developing ‘Gramin Bharat’.

Mr. Singh urged producers to ensure stability in steel prices while deciding on the market price of common varieties of steel used for mass consumption.

“For steel to be acceptable, in preference to other replacements, the common man must find that it is affordable and cost effective. The private sector steel units must follow the lead taken by PSUs in opening rural distribution networks and see that their products of mass consumption are easily available in the remotest parts of the country at affordable prices,” he added.

Industry chamber FICCI has urged the government to double customs duty on steel and impose a safeguard and anti-dumping levy, in view of rising imports. In a study, FICCI said steel imports in India had almost doubled as a percentage of domestic consumption in the past few years, rising from 6 per cent in 2005-06 to 11 per cent in 2008-09. Actual imports were at 10 million tonne in the last financial year, up from 4.3 mt three years earlier. Citing the study, FICCI said customs duty should be raised from 5 per cent to 10 per cent and the domestic industry should be given an enhanced depreciation rate of 25 per cent instead of 15 per cent at present.

Although India produced more steel in 2008 at 55.1 mt, the growth in output fell to 3.71 per cent from 7.34 per cent. However, India’s rank in global steel production has moved up — from the fifth position with 4 per cent share in 2008 to the third position with 8 per cent share in the first five months of 2009. The output in these months was 22.7 mt.

With the local steel industry losing market share to the foreign companies, FICCI has asked the government to raise customs duty on steel from 5 per cent to 10 per cent in the forthcoming budget.

A FICCI study on steel found that steel imports now occupy over 11 per cent share in India’s steel consumption as compared to six per cent a few years back. Also, India’s imports of steel and allied products have almost doubled in the last four years.

India imported 10 million tonnes of steel and allied products in 2008-09 as compared to 4.3 million tonnes in 2005-06, observed FICCI. India is the third largest producer of steel in the world behind China and Japan.

The industry body said that China has announced tax incentives of up to nine per cent on export of steel products.

This move has been a source of concern for the Indian steel industry, as China is the largest exporter of steel to India.

Industry body FICCI has asked the government to raise Customs duty on steel from 5% to 10% in a set of pre-Budget suggestions for hte steel sector. This has been recommended to protect the domestic industry from the threat of cheap imports of steel. To increase the share of Indian steel producers in domestic consumption, the government should consider a hike in the basic Customs duty on steel, it said, adding that imported steel occupies an over 11% share in domestic consumption compared to 6% a few years ago.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has asked the government to raise the Customs duty on steel from the present level of 5% to 10% in a set of pre-Budget recommendations for the steel sector, reports our Bureau. This has been suggested to protect the domestic industry from the threat of cheap imports of steel. The chamber has also proposed for safeguard and anti-dumping duties on import of steel.

The production and consumption of steel would surpass 2008-09 levels in the current fiscal, Steel Secretary Mr P K Rastogi said here on Wednesday.

“We feel... consumption as well as production will be higher in 2009-10,” Mr Rastogi said at the FICCI Steel Summit here.

On account of marginal increase in demand for the commodity from sectors like construction and automobile in the last three months, India`s steel production was up by 1.2 per cent and consumption by 3.8 per cent in the last quarter of the previous fiscal ended March, 2009, over the year-ago period.

The domestic steel industry saw demand waning by about 40 per cent and parallel fall in prices on account of global industrial downturn in past six months as against the levels witnessed in early 2008. Prices have come down to $500 a tonne level from the highs of $1150-1,250 a tonne last year.

On the price front, Mr Rastogi ruled out any changes in rate structure, saying it has stabilised. “Price to my mind has bottomed out and stabilised. It should not go up and it should go down because raw material prices are coming down,” he said

The steel secretary further said the export of the commodity is not likely to improve in fiscal 2009-10. In the last fiscal export of steel was lower than 2007-08. "...Because price is low as well as demand, export of steel from India will be definitely less (in the current fiscal)," Rastogi said.

The production and consumption of steel would surpass 2008-09 levels in the current financial year, steel secretary Mr PK Rastogi said here today.

“We feel... consumption as well as production will be higher in 2009-10,” Mr Rastogi said at the FICCI Steel Summit here.

On account of marginal increase in demand for the commodity from sectors like construction and automobile in the last three months, India`s steel production was up by 1.2 per cent and consumption by 3.8 per cent in the last quarter of the previous fiscal ended March 2009, over the year-ago period.

The domestic steel industry saw demand waning by about 40 per cent and parallel fall in prices on account of global industrial downturn in past six months as against the levels witnessed in early 2008. Prices have come down to $500 a ton level from the highs of $1150-1,250 a ton last year.

On the price front, Mr Rastogi ruled out any changes in rate structure, saying it had stabilised.
“Price to my mind has bottomed out and stabilised. It should not go up and it should go down because raw material prices are coming down,” he said.

The steel secretary further said the export of the commodity was not likely to improve in fiscal 2009-10. In the last fiscal export of steel was lower than 2007-08. n PTI

Even as Steel Secretary P. K. Rastogi painted an optimistic scenario for the domestic steel industry saying that “greenfield capacity expansions will re-emerge sooner in India compared with other countries due to clear signs of demand prospects,” Federation of Indian Chambers of Commerce and Industry’s (FICCI) steel committee chief and SAIL Chairman S. K. Roongta cautioned against a “euphoric response” and urged steelmakers to adopt a collaborative approach towards demand creation, sharing of best practices, skill development, environmental protection and beneficiation of raw materials. Inaugurating a national conference on ‘Indian steel industry: The way forward’ organised by the Steel Ministry and FICCI here on Wednesday, Mr. Rastogi said: “The Indian steel industry has weathered the financial storm reasonably well.

Macroeconomic factors

The Q4 numbers on production and consumption of steel is a clear indication of the resilience and strength of our steel industry.” Responding to FICCI President Harsh Pati Singhania’s concern that the global downturn had given rise to protectionist tendencies worldwide with U.S. steel producers demanding stringent conditions like ‘Buy America’ clause to substitute imports with domestic production, the Steel Secretary listed four macroeconomic factors that were likely to aid the recovery in steel demand in India.

Among these, Mr. Rastogi said, the primary factor was the expectations of a 5-7 per cent GDP (gross domestic product) growth in 2008-09 and possibilities of GDP returning to a higher growth trajectory during the current fiscal.

Second, with capital formation and savings rate continuing at levels exceeding 30 per cent, there would be higher elasticity of steel demand with respect to growth in GDP.

Third, the thrust on infrastructure in the XI Plan is expected to boost steel demand. And finally, the lower rate of inflation would offer room for aggressive price cuts and provide a fillip to investment and consumption.

Look inwards

NMDC Chairman and Managing Director Rana Som stressed the need for looking inwards to meet domestic demand for which a bit of protection to the industry was in order.

Prime Minister Manmohan Singh on Saturday said certain sectors of the economy had showed signs of revival following the stimulus packages that were put in place by the Government to combat the slowdown.

“While we need to bear in mind that the time taken for these steps to take effect varies across measures and sectors, there are signs of improvement in sectors like steel and cement. The auto sector after a difficult patch seems to be showing signs of recovery… The rural demand for goods and services appears quite robust and the outlook in the agricultural sector gives room for optimism,” he said.

Economic perspective

Putting the overall economic scenario in perspective, Dr. Singh, at a meeting with captains of industry here ahead of his departure for the G-20 Summit in London on April 2, said that while India was “decidedly better placed” than most countries in the world, there were uncertainties with regard to the global situation. In the event, he said: “To tackle a regime of low inflation and demand uncertainties across sub-sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserves responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline, and to act continuously to improve general sentiment are challenges that we confront as a nation… We must meet the challenge of job losses caused by the slowdown.”

Taking stock of the credit flow situation, Dr. Singh pointed to the Reserve Bank of India data as at the end of February 2009 which show that while the credit growth of public sector banks (PSBs) has been 23 per cent this fiscal as compared to 21.9 per cent in the same period of 2007-08, the credit growth of private and foreign banks has been one-third to one-fourth of what it was a year ago.

“While public sector banks have reduced the prime lending rates in the last three months between 150 and 200 basis points, other scheduled commercial banks are yet to respond in equal measure,” he said.

Participating in the discussions, Confederation of Indian Industry President Venu Srinivasan pointed out that while certain sectors were beginning to show some signs of recovery, others like manufacturing and small and medium enterprises (SMEs) “were in great pain”. Federation of Indian Chambers of Commerce and Industry President Harsh Pati Singhania noted that more stimulus packages would be required to boost growth while Associated Chambers of Commerce and Industry of India President Sajjan Jindal viewed that bank lending rates should be reduced immediately to spur the economy.

The Prime Minister also sought the views of corporate leaders on the stand that should be taken at the G-20 Summit. Industry captains pointed out that India must express its strong opposition to global protectionism and also highlight the issue of dumping by China.

Apart from the apex chamber chiefs, representing India Inc. in the interaction, among others, were Tata group chief Ratan Tata, Aditya Birla group Chairman Kumar Mangalam Birla, ICICI Bank Managing Director and CEO K. V. Kamath, Essar Group’s Shashi Ruia, R. P. Goenka (Goenka group), Adi Godrej (Godrej group), Sunil Kant Munjal (Hero group) and Baba Kalyani (Bharat Forge).