Sushim Banerjee, Director General of the Institute of Steel Development and Growth (INSDAG) is carrying out a Herculean Task of spreading awareness among those who will act as catalysts in driving India’s steel demand tomorrow. Here he talks exclusively to Core Communique about steel trends, both on the demand and supply side and explains why India’s low per capita consumption of steel accords a huge opportunity. Excerpts:
Q.1 During April – November 2012 the Indian Steel industry achieved a growth rate of 5.36% which was the highest in the world. During the said period China stood third with a growth rate of 3.36%. The World’s Average growth rate of steel was just 0.97% during this period. What does this mean in real terms?
A. The growth rate of crude steel production in India has been the highest during April – November 2012 period. The growth rate calculated on a low base does not change the ranking of India as 4th largest producer of steel in the world. However, in real terms it only shows that India has a high potential to grow in the coming years.
Q.2 How will such production buoyancy affect the consumption of steel in India which is still abysmally low by global standards?
A. More availability of steel in the domestic market by higher production definitely helps the domestic consumption to grow. India as a developing country has a massive infrastructure deficit which requires good amount of steel for construction purposes. In spite of major hurdles, the higher production by the steel producers in the country primarily through brown field expansion could cater to the growing needs of the critical sectors of the economy.
Q.3 How do you see this low per capita consumption – as a continuing failure or a huge opportunity?
A. The low per capita consumption in the country is indeed a huge opportunity for higher potential of steel consumption. However, the per capita income of the growing population is a major determining factor of how India exploits the high potential of steel consumption in the country. The Govt., therefore, is intensifying its efforts of inclusive growth with sustainability so that steel use becomes more widespread.
Q.4 What is INSDAG doing to meet this gap?
A. The Institute for Steel Development & Growth (INSDAG) has been constantly enveadouring to bridge the gap of high potential and the actual steel consumption by creating awareness amongst the students of engineering colleges, faculties and professionals to harness the knowledge of steel into actual application in the various critical sectors of the economy. INSDAG is also emphasizing the widening of knowledge dissemination by putting thrust on developing village entrepreneurs into steel fabricators by hands-on training combined with theoretical knowledge. INSDAG believes that this will open up a high level of use of steel and composite construction in the re-building of Indian economy.
Q.5 Where do you see India’s production and consumption in the year 2020?
A. A recent study on Indian Steel Vision in 2020 has put the estimated finished steel demand in the country to be of the order of 155 million tones corresponding to a GDP growth of 8%, 141 million tones for GDP growth of 7% and 128 million tones with GDP growth of 6% by the year 2020. The realistic capacity of crude steel has been estimated in the study to be of the order of 202 million tones by the year 2020.
Q.6 Anything that you would like to communicate to our readers.
A. India’s economic growth in the next decade emphasizes inclusive and sustainable growth. As it is appreciated that unless the benefits of economic growth are percolated down to the poor people, the inequality of income would rise, leading to disruption in the growth process. Steel has a very important role to play in tandem with this objective in terms of a number of benefits revealed by life cycle analysis with steel having maximum recyclability ensuring faster construction. The properties of steel with ductility and strength lead to innovative and effective use of steel for construction and manufacturing and processing industries to serve the critical needs of various sectors of the economy.
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