Saurabh Gupta | 05 Nov, 2009
To meet the growing demand of steel, the steel sector has to double its production in the next five years, and around 200 million tonnes (mt) by 2020. This was expressed by Union Minister of State (MoS) for Steel Prathap Annayyagari at a seminar on steel oganised by the Confederation of Indian Industry (CII) in the national capital on Wednesday.

As the Indian economy is looking up, the country's steel industry is also moving northwards. During the last five years, the growth in the demand for steel has averaged to around 10 percent. The surge in this demand would continue for the next decade or two.

Speaking as the chief guest on the CII Steel Summit on 'Advantage India - An enabling framework for growth', the minister said India's current per capita consumption of steel is 47 kg, against the world average of 190 kg. However, this shortfall could be improved upon if our forward linkages of steel were aimed at tapping the rural demand.

The Ministry of Steel has signed over 220 memoranda of understanding (MoUs) for bringing additional capacity of 276 mt. Though most of these are brownfield, there are some Greenfield projects also on the anvil. There are various problems like land acquisition, availability of water and other raw material, besides forest and environmental clearance, and some of these issues have been mentioned in the New Mineral Policy, the minister pointed out.

Annayyagari also touched upon the fact that out of India's total steel production of 55 million tonnes, about two-thirds - over 36 million tonnes - of crude steel is produced by secondary producers and standalone processors who are unorganised.

Earlier, SK Roongta, chairman of Steel Authority of India Ltd, spoke on the opportunities and key challenges facing the steel sector. He highlighted four areas of challenge such as technology and process, availability of skilled manpower, issues relating to policy support and the resettlement and rehabilitation (R&R) policy.

"India has to find a way out to manufacture steel, and there has to be a quantum jump in steel production," he pointed out.

In his concluding remarks, CII Director General Chandrajit Banerjee said the steel industry was of pivotal importance to Indian industry and CII.

"CII has been working towards strengthening the global competitiveness of Indian steel industry over the years through its specialized services related to quality, energy efficiency and competitiveness," he added.