Reforms in the Steel Industry led by the Government

Steel is one of the innate contributors to the development of a modern economy. As the steel industry moves in an upward direction, even the economy of the country moves upwards. Thus, it is an essential sector that the Government closely monitors. The government constantly focuses on driving initiatives that nudge the steel sector towards expansion and prosperity. Considering the scale of the industry, any initiative driven by the government in favor of the steel industry further impacts a multitude of industries connected with it like automotive, infrastructure, consumer durables, etc. Thus, it is a win-win situation for every stakeholder, eventually leading to the economic growth of the country.

In the latest budget, the Government has given a huge impetus for the development of infrastructure, which is the biggest consumer of steel. Fast tracking construction of infrastructure development projects will lead to an increase in demand for steel. One of the key initiatives is the expansion of national gas grid and piped water supply to households that will keep the steel mills rolling and churn out steel on a massive scale, considering the amount of steel that these projects will consume. Additionally, the government’s decision to modify Indian Railways and develop new airports have ushered a new ray of hope to the steel industry.

In order to support the MSME sector in ease of doing business and supplying with enhanced knowledge and resources, the government has announced the Production Linked Incentive Scheme which is currently awaiting Cabinet approval for the steel industry. It is an incentive towards enhancing manufacturing for fulfilling domestic demand and reducing fulfillment of imports. This will also make the domestic market more cost competitive and motivate the industry players to set up steel mills to ramp up production. It is aimed at pulling the MSMEs out from the deep pits that they have fallen in due to the Covid-19 pandemic.

Further, the government has also rationalized duties and taxes to support the domestic demand and promoted the adoption of digital technologies through incentives. As a result, several industry players have introduced technologies like the digital twin of blast furnace that enables real time optimization, artificial intelligence-based tools that will improve overall operational efficiency and reduce costs.

The National Steel Policy 2017 that aims to produce 300 million tons of steel by 2030 is being worked on with equal vigor by the Government as well as industry players. The Ministry of Steel has proved their assertion on maintaining the quality of steel by introducing 145 quality standards to which every manufacturer needs to ensure their adherence. The Ministry also actively supports the Research & Development in the industry through grants of financial assistance for activities like innovation in utilization of iron-ore, reducing environmental damage, waste management, and various other areas of steel production.

This attention of the Government towards the steel industry is a positive sign of economic development. For an industry that is so complex and cost-intensive, Government intervention is of paramount importance for its growth. If India, which is one of the largest producers as well as consumer of the commodity, is able to implement these reforms effectively, it will soon establish its credibility globally.

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