Niti Aayog favours new steel policy to achieve 300 MT target

Government think tank Niti Aayog has mooted a new and dynamic steel policy to bring the over $100 billion industry back on track as well as meet the target of 300 million tonnes (MT) capacity by 2025.

The country's premier policy maker feels that mere changes in the National Steel Policy, 2012, will not help the sector that in the last few years has been flooded with cheap imports from China, Korea and Japan impacting its sales and profits, which has negatively influenced its capacity to repay debts.

"There is need for a new and dynamic steel policy. Seeing the current situation of the steel sector, it may be unlikely to achieve the targets envisaged in National Steel Policy 2012 i.E. A capacity of 300 MT and production of 275 MT by 2025," the Aayog said in a Working Paper on the sector.

It further said: "To bring steel sector back on track, mere tinkerings in the present policy would not bring out a transformational change that is required."

The Aayog feels that there is a need to examine the entire value chain associated with the industry - from raw materials to production of finished products - to discover the bottlenecks in the sector.

The Working Paper - prepared by Niti Aayog Member V K Saraswat and Niti Aayog professional Ripunjaya Bansal - said that an ecosystem has to be created that will ensure profitability of the associated industry be it mining, pet coke, pellet, sponge iron, etc.

Another pertinent issue is that it needs to be ensured that none of these make windfall gains at the expense of others, it added.

Aayog said that banks and transport unions have to be consulted and brought onboard in formulating a new policy to ensure availability of long-term finance at competitive rates and smooth, efficient transportation of materials at uniform prices, respectively.

"NITI Aayog, being government's think tank, would be the right place to build on the consensus for a new National Steel Policy with the support from different stakeholders comprising various Ministries, PSUs, State governments, industry associations, academia, think tanks etc," it said.