 "Govt should come out with package for steel industry: Naveen Jindal")
Jindal Steel and Power Limited chairman Naveen Jindal, a businessman-turned-politician, had been in the news because of the challenges he faced following the cancellation of the coal blocks. About Rs 40,000 crore of his investments in Odisha are under stress due to raw material problems. In an interview with Dillip Satapathy, Jindal talks about the current problems straddling the steel industry and his businesses. Edited excerpts:
What do you make of the present stress in the steel industry?
The steel industry is in the doldrums. On one side, the dumping from China has increased and, on the other, domestic industry has been rendered uncompetitive due to high input cost, freight and port handling charges, multiple levies and high interest rates. Globally, iron ore and coal prices have come down, but not in the domestic market. While some iron ore mines are closed, Coal India has monopolistic hold on coal resources. In Japan, the government and the end-use industries together decide the raw material prices. But here, raw material prices are jacked up artificially.
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The government should take drastic steps to ensure uninterrupted supply of raw material at economic prices to the end-use plants. More mines should be opened to make raw material available to industries. Other issues that require immediate attention are resolution of land acquisition issues in a time-bound manner, rationalisation of logistics as per international norms and incentive for the local industry. Also, to beat Chinese dumping, the government should impose safeguard duty on steel imports up to 20 per cent.
The government plans to impose 20 per cent safeguard duty…
That will be a big help for the industry, which is in a bind now. But, apart from safeguard duty, they must come out with a special package for the industry. The interest rates are very high in India. They must cut interest rates by two per cent across all industries and by four per cent for the steel industry. In various turns of global economy, some domestic sectors need protection and special packages. Today, it is steel, which contributes 2.5 per cent to the gross domestic product.
Your investment in Odisha is also suffering because of lack of raw material…
We were allotted coal blocks in Odisha, based on which we had planned Rs 40,000 crore investment, the largest in the group, in the state. For the first time in the world, we adopted coal gasification technology to make steel. The plan went awry with the government cancelling the blocks and earmarking them for the power sector. Those coal blocks, if allotted to the power sector, would help build a 1200-Mw power plant with Rs 6,000-crore investment and 600 jobs, whereas in our six million tonne steel mill we proposed 25,000 employment, apart from setting up a 1100 Mw power plant. The picture is very clear. That is why we went to the court. The high court went in our favour and asked the Centre to review the case. But they went to the Supreme Court instead.
Do you think you have been victimised, as the coal blocks you got in auction have also been cancelled?
We are fighting the cancellation in the court. Life is full of challenges. You continue to do your things sincerely and honestly. The challenges only make you stronger. We have set up plants with the most modern technology. We have come up to this level because of our hard work, and team effort. We will work harder and come out stronger.
For iron ore, are you going to participate in the auction?
We will participate in the auction when the time comes. But the state government must give preference to the end-use plants. It should differentiate somebody who wants mine for mining purposes and somebody who wants mine for a large plant. If you are setting up a plant, then there is 50 to 100 times more investment and at least 20 times more job creation compared to only mining. There is no comparison between the two. They can have different categories of mines only for mining and for captive use. The rule of auction gives the power to the state to have a preferential mechanism to reserve some mines for priority sectors. On behalf of the Indian Steel Association, we have also drawn the attention of the Odisha Chief Minister to this point.
