Government's policy approach for exit of financially stressed units certifies transparency in the process with the possibility of takeover by alternate efficient management under the new bankruptcy law, Steel Minister Chaudhary Birender Singh said.
The statement comes a few days after after the government promulgated an ordinance to bar wilful bank loan defaulters as well as those with NPA accounts from bidding in auctions being done to recover loans.
"Steel companies have to sustain by being competitive and having a disciplined approach towards loan management," an official statement quoted the minister as saying.
In view of the optimistic possibilities of the future of the steel sector, India is going to be a major destination for steel investors, he said.
"Steel being a deregulated sector in India, setting up of capacities is based on the investors own assessment of profitability in the sector," he said.
Investment also depends on the nature of the market based on present and future demand in the sector, he said adding the state-owned enterprises and private companies compete on equal footing in the steel sector in India.
In order to take effective steps to address the challenges of excess steel capacity, members of the Global Forum agreed to share information, cooperate and develop concrete policy solutions.
"Six guiding principles contained in the progress report lay the foundation for taking tangible policy actions to reduce excess steel capacity," he said.
On the basis of these principles, the Global Forum made few key recommendations.
While most of the key recommendations in the draft report generally have been agreed by all members, there are a few recommendations where some member countries have expressed caution, the statement said.
"One such area of concern for India is regarding the basis of prescribing key recommendations.
"While India agrees that the policy recommendations cover all market distorting subsidies and other types of support provided by government or government-related entities, there should be acknowledgement of existing WTO agreements," the statement said.
The draft report has indicated support only for the WTO agreement on subsidies and countervailing measures which is not sufficient as there is another support measure sought to be covered in the key recommendations in the progress report which finds mention elsewhere in WTO agreements.
It would accordingly be desirable that while making key recommendations, there is acknowledgement of WTO agreements, the statement said.