Steel Ministry to Pitch for Cheaper Credit in Presentation to PM Modi: Report

The Steel Ministry is likely to highlight the need for raw material security, cheaper credit and dilution of stake in public sector undertakings (PSUs) to 51 per cent in a presentation to Prime Minister Narendra Modi on Friday.

The ministry is also likely to pitch for single-window clearance mechanism and creating special purpose vehicle (SPV) in collaboration with states for fast-tracking land acquisition and statutory clearances for greenfield projects.

The presentation is to be made by Steel Secretary G Mohan Kumar as India strives to achieve the target of trebling its steel-making capacity to 300 million tonnes per annum (mtpa) by 2025.

Sources said he is likely to impress upon Mr Modi that cheaper credit is essential for taking the capacity to 300 MT from around 96 MT at present. It takes around $1 billion to create every million tonne of steel capacity, entailing huge investments.

Mr Kumar is also likely to float the concept of a 'special mining zone' for iron ore and coal, and make a plea for sprucing up required infrastructure for handling and transportation of raw material and finished products, the sources said.

They added that citing uncertainty in raw material policy as "a big barrier" for fresh investments in the steel sector, Mr Kumar is expected to touch on the industry's concern that investments made in steel plants look unviable without long-term iron ore availability at stable prices.

He is likely to highlight "discrimination" in allocation of coal mines to steel sector vis-a-vis the power sector.

He may also bring to Mr Modi's notice that no coal linkages were given to steel plants since 2008, and 44 out of the total 69 blocks allocated have been deallocated even in cases where allottees completed the end-use plants. Curtailment in the supply of gas making 10 mtpa capacity unviable may also find mention in the presentation.

The Steel Secretary will also raise concerns on the imposition of condition regarding iron ore by states like value-addition within the state, restriction in the free movement and cap on production in states like Karnataka and Goa, a source said.

Mr Kumar may also advocate for the increased availability of domestic coking and thermal coal to the steel sector and urge the Prime Minister to allocate some coal blocks to state-run miner NMDC for exclusive use to the steel sector. He may also request transferring coking coal assets to the Steel Ministry from the Coal Ministry.

Besides, he may pitch for allowing duty-free imports of critical raw material for the steel sector like iron ore, coal, scrap and natural gas and urge the Prime Minister to accord top priority for gas allocation to those units whose gas linkages were cancelled.

On dilution of stake in state-run firms to 51 per cent, Mr Kumar may suggest that the exercise could bring in around Rs 33,000 crore for national development, sources said.