Don’t seek windfall gains, PM tells steel firms (Intro Roundup)

April 22nd, 2008 - 9:18 pm ICT by admin  

A file-photo of Manmohan Singh

Jamshedpur/Bokaro , April 22 (IANS) Prime Minister Manmohan Singh Tuesday asked steel companies not to seek “windfall gains” by taking advantage of the current inflation and keep in mind the interest of consumers. “I would humbly advise our steel industry… to take a long term view and not fall prey to the temptation of seeking windfall gains from market manipulation in a period of excessive temporary demand,” Manmohan Singh said.

“The Indian economy will continue to grow and the demand for steel will continue to grow. Industry and trade must therefore eschew short-term gains that hurt consumers and disrupt the stability of the processes of economic growth,” he added.

He was addressing the Tata centenary celebrations in Jamshedpur. His comments came in the backdrop of the annual rate of inflation hitting 7.14 percent and the rise in prices of essential commodities.

“In the past 100 years the production and consumption of steel has increased significantly. But the consumption of steel in India is still below that of many newly industrialising nations,” Manmohan Singh said .

“Therefore, steel is as much an industry of the future as it is an industry of the past and the present. There is vast potential for the growth of this industry, and for its expansion and modernization, in years to come,” he added.

Earlier this month India steel firms were compelled by the government to reduce prices. However, the steel companies say they are facing a lot of difficulties in obtaining raw material such as iron ore and coal as their prices have also touched record highs.

Earlier in the day, the prime minister laid the foundation stone of a Rs.110-billion expansion and modernisation project of the Bokaro Steel Plant, one of India’s largest steel mills

In Bokaro too, he urged steel traders not to take advantage of the situation and said: “Our government will take necessary steps to curb the rising prices.”

The capacity of the steel plant, which produces 4.5 millions tonnes of hot metal, will go up to 7.44 million tonnes after the expansion. Its crude steel production also will rise to 7 million tonnes from 4.36 million tonnes.

The prime minister also laid the foundation stone for a cold rolling mill and a steel melting shop.

“SAIL (Steel Authority of India Ltd) was the mark of industrialisation of India, and the role of the Bokaro plant was crucial in (the country’s) industrialisation,” Manmohan Singh said. “The modernisation of the plant will create employment in the state.

Bokaro Steel Plant was built with Russian help in the 1960s when a newly independent India was laying the foundation for industrialisation.

“Our steel industry in growing fast. And it has to achieve miles and increase its production to meet the demands. There is a lot of scope for modernisation in the steel sector.

“And it is my firm belief that the Bokaro plant will achieve several milestones in the steel producing sector,” the prime minister said.

Steel Minister Ram Vilas Paswan said his ministry was ready to set up a steel plant with 12 million tonne capacity in Jharkhand if the iron ore dispute with the state was settled.

“The steel ministry is serious about setting up a 12 million tonne greenfield steel plant. The new project is getting delayed due to the dispute over Chiria mines between the ministry and the Jharkhand government,” said Paswan.

“The ministry has made a proposal to the state of sharing 1 billion tonne iron ore each. However, Jharkhand has not followed up the proposal. The Chiria mines dispute is now pending in the Jharkhand High Court. The dispute should settled soon to help the expansion of SAIL,” he added.

“I appeal to the state government to expedite the mater. The production of steel is rising by 10 percent every year in the country but consumption is rising by 13 percent. We need to increase our production.

“SAIL has moved to the fifth position from eighth in steel production in the last four years. It is likely to achieve second position by 2015. Our initial target was to achieve 110 million tonne output by 2020, but now we have set a new target of 124 million tonne by 2011,” Paswan added.

According to him, SAIL needs Rs.540 billion ($13.5 billion) for expansion and modernisation of the steel plants to achieve the target.

“The steel industry majors like Nisco and BRL will merge with SAIL by 2011,” the minister announced.

The steel minister also announced to give Rs.3,000 reward to each employee of SAIL as the company is celebrating it’s golden jubilee.

Meanwhile, over 100 workers of the opposition Bharatiya Janata Party (BJP) were arrested in Ranchi while protesting over rising prices of essential commodities during the prime minister’s visit.

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