"We shall achieve 124 million tonnes steel capacity by 2011-12, well exceeding the requirement that would be about 110 million tonnes at that point of time," Steel Minister Ram Vilas Paswan said.
Steel prices shot up by over 50 per cent since January, adding to the woes of the UPA government, which is battling a seven-year high inflation of 8.75 per cent in its last year.
The annual demand for steel in India has been rising by about 13 per cent, but production is growing by over 6 per cent, according to official sources.
In the last financial year, the country's crude steel production stood at 53.9 million tonnes, of which about 5 million tonnes were exported. To bridge the demand-supply mismatch, India had to import nearly 7 million tonnes of steel.
Steel Secretary R S Pandey, while saying that India became a net steel importer from being a net exporter till a few years ago, said the trend is likely to continue for sometime as increase in capacity takes at least three to four years.
As per official figures, the country's finished steel import went up by over 300 per cent from 1.6 million tonnes in 2002-03 to nearly 7 million tonnes in 2007-08 (provisional).
In view of the growing demand, the government plans to scale up steel production to over 290 million tonnes by 2020. It has also envisaged that the sector will see an investment of Rs 8,70,640 crore by that time.
Going by an estimate of Rs 4,000-crore outlay per million tonne of additional capacity, an investment of Rs 2,76,000 crore is likely by 2012 and Rs 8,70,000 crore by 2020.
As of now, both domestic and foreign steel players have signed 193 memoranda of understanding with states for setting up new units with a total planned capacity of around 243 million tons and a total proposed investment of over Rs 5,14,000 crore.
Private and public sector steel companies have also embarked on capacity expansion. Steel Authority of India Limited plans to take up its hot metal production to 26.13 million tons by 2010 from the present 12.84 million tons.
Private steel majors including Tata, JSPL, Ispat and JSW Steel have also lined up expansion of their existing production strength.
