Tata Steel Managing Director T V Narendran today said steel demand would grow by at least six per cent next fiscal with the country's economy projected to grow by 5-7 per cent.
"Next year's GDP forecast is 5-7 per cent. Typically, steel demand grows by 1.2 to 1.3 per cent of the GDP growth. If the GDP growth is 5 per cent, I am expecting demand should grow by 6 per cent," Mr Narendarn told PTI on the sidelines of a CII event here.
During the first 10 months of the current fiscal, steel consumption in the country grew by just 0.5 per cent impacted by subdued economic growth.
Mr Narendran said the subdued steel consumption growth in the current fiscal is mainly due to poor demand for commercial vehicle and construction segments as they were "struggling".
"If you look at it, most the growth in the GDP has come from the agriculture segment. That's why steel demand did not grew much," he said.
Next fiscal, demand would come from construction sector, which generally consumes 60 per cent of the steel demand in the country.
"Construction generally consumes 60 per cent of the steel demand. In the last few months, government has cleared lot of projects. So, hopefully, that will start coming into the pipeline," Mr Narendran said.
Automobile sector consumes around 15 per cent of the total steel demand.
Indian economy grew by 4.8 per cent during July-September quarter. It had hit a decade's low of 5 per cent in 2012-13 due to poor performance in the farm, manufacturing and mining sectors.
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