The Orissa government proposes to frame a state policy on steel industries.
The steel and mines department has started the exercise in this regard. It has written to the state owned Industrial Promotion and Investment Corporation Limited (Ipicol) to appoint a consultant to guide the government in formulation of such a policy.
The proposal is in the preliminary stage and the detailed modalities are being worked out, official sources said. “It is in preliminary stage and we are working on the modalities. Ipicol has been asked to pilot the policy”, Ashok Dalwai, secretary, steel and mines, Orissa government told Business Standard.
The move assumes importance in the context of apprehensions in some quarters about the ability of the government to provide the required raw materials to the MoU signing steel companies in a sustainable manner.
Couple of months ago, K V Kamath, president, Confederation of Indian Industry (CII) had suggested for conducting a study to assess the available mineral reserves in the state and find out how many steel plants can be sustainable. Sources said, the proposed steel policy will focus on providing the raw material linkage to the companies signing memorandum of understanding (MoU) with the Orissa government.
Besides, it will seek to identify the best technology for the units in the steel sector, the products to be produced in the state, size of the plant suitable for Orissa and suggest measures for survival of the small and medium steel plants in the face of stiff competition from the countries like China. Since countries like China have fixed the minimum size of the steel plant at 5 million tonne per annum, the government feels a similar size fixation is required for the units coming to Orissa. Consequently, the policy will focus on the measures to be taken by the government for enabling the small and medium steel plants in the state to face world competition.
The policy will also focus on the type of steel product suitable for the state. While there is more demand for the long products in the developed countries for its extensive use in the construction activities, the demand for flat products is more in the developing countries. Keeping that in view, the policy will try to specify the most beneficial product mix for the state keeping in view the world market conditions, sources added.
The Orissa government has so ar signed MoU with 49 medium and large steel companies for setting up their plants in the state envisaging an investment of about Rs1,98,150 crore. Out of it, 28 steel plants have started partial production and provided direct and indirect employment to 47,181 persons.
Units starting partial production also contributed Rs 31.89 crore to the peripheral development by end of 2007.The contribution to the state exchequer in the form of taxes and duties was estimated at Rs 341 crore while the contribution to the Central exchequer was about Rs 682.54 crore.
