Source: Business Standard
With the government gearing up to spend Rs 3.96 trillion (allocated in this year’s budget) towards the development of infrastructure, such as ports, roads, affordable housing and physical infrastructure, Steel Users Federation of India (SUFI) expects a big boost in demand for steel in the country. The Indian government’s has laid emphasis on ‘Be Indian Buy Indian’, thus emphasising to necessarily buy only domestically manufactured steel which will eventually drive the consumption, said SUFI.
Nikunj Turakhia, president, SUFI, explained, “The industry in under great anticipation since the big budget allocation in infrastructure development, as the announcement sets high consumption targets. This can prove to be a major demand driver for the growth of steel sector. Such a move from the government augurs well for further investment in steel sector, giving a major push to the industry as a whole.”
However, to reap the benefits of this surge in demand, steel industry and the government will have to find ways to solve the challenges such as inefficient logistics system, high interest rates, lack of assured raw material supply & huge debt.
“Once these issues are addressed properly, we believe there is no stopping for industry to achieve its production target of 300 million tonnes by 2030 from the current 110 million tonnes,” added Turakhia.
India is all set to grab the second position from Japan as the largest steel producer by 2018-19. As per the projections by Indian government, the Indian mills marked record level production to meet the increasing demand in infrastructure, new homes and consumer goods.
“It is a matter of pride for every Indian and steel stake holders to see the industry perform at a record growth rate. The rapid progress in infrastructure development and adherence to government’s initiatives such as Make in India has given boost to steel producers across nation,” said the president of SUFI.