There is no doubt that India will strive to achieve the status of a global
economic and industrial power by 2020 – and will become one. While most people in the steel
industry, given India’s
past track record, believe that the Joint Planning Committee
target of an increase of 70mT to 100 mT by 2018 is not attainable this writer opines
that this is rather conservative.
We cannot have just a few pockets of development. Instead, one foresees that due to political compulsions, irrespective
of the party in power at the Centre, the Government policies will lay stress on development of the vast areas that have hitherto
been neglected – alongside the liberalisation
and open market policy of recent years. Infrastructure improvement across the country is a prime requisite to further development.
For this, India will necessarily need
to reach a per capita steel consumption of at least 100 kg, if not more, by 2020. The ratio of long to flat products will
also be set right to about 55% long and 45% flat. It is unlikely that past mistakes will be repeated.
With an estimated population of around 1.4 billion in 2020, this level of consumption will mean a steel
requirement of about 140 million tonnes per year – or an increase of 110 mT in 16 years (2005-2020) from the current
level. This is definitely feasible if one considers that China increased its production by
70 mT (130 to 200 mT) in 4 years from 2000 to 2003. India
can do it too, and will, even though it involves an investment of about Rs 3,000,000 million (3 lakh crore) in 16
years. If we do not achieve this production level massive imports will surely be resorted to - because development is
not going to stop merely because the steel industry is not up to the challenge. It is entirely up to the industry.
This estimate is shown in Chart 4.