SteelMin for trimming PSU stakes, boosting production

Ministry suggested that the new govt should bring down stakes in steel PSUs to 51% and utilise the proceeds for development

Diluting PSUs' stake to 51%, ensuring raw material security to steel makers and steps to boost production are among a dozen suggestions by the Steel Ministry for the new government.

In a presentation for the Cabinet Secretary, the ministry suggested that the new government should bring down stakes in steel PSUs to 51% and utilise the proceeds for development.

The presentation comes ahead of Narendra Modi led BJP government taking charge on Monday.

Steel Authority of India (SAIL), Rashtriya Ispat Nigam (RINL), iron ore miner NMDC Ltd, manganese ore producer MOIL Ltd and pellet maker KIOCL Ltd are the major PSUs under the administrative control of the Steel Ministry.

Government has 80% stake each in SAIL, NMDC and MOIL. RINL and KIOCL are yet to be listed. It can rake in a whole lot of funds by pruning its stakes down to 51% in these companies.

The ministry has also suggested that there is a need to reform the current raw material policy and allot captive mines to steel producers so that they meet at least half of their long-term requirements.

There is also a need to introduce single-window mechanism for streamlining the allocation of raw materials.

It was also stated that there is need to create "special mining zones through a special legislation and prepare comprehensive environment, forest management plans for areas declared to be bearing raw material like iron ore and coal".

The ministry also suggested that initiatives should be taken to raise country's steel production capacity to 300 million tonnes per annum (mtpa) within the next 10 to 15 years from around 100 mtpa now.

To achieve this goal, special purpose vehicles should be created in collaboration with state governments to fast track land acquisition and statutory clearances, it said.

In line with power sector, which is entitled to duty-free imports of gas, steel sector should also be allowed to import critical raw material like iron ore, natural gas and scrap without any duty, officials said.

The ministry also pitched for creation of a National Institute of Steel either as a university or deemed university for meeting technical manpower requirement of the steel industry and for nurturing research and development initiatives.