Paswan summons steel firms over rising shortages
Business Standard

Concerned over the demand-supply mismatch in the steel sector, Steel Minister Ram Vilas Paswan will meet major producers of the alloy tomorrow to assess their capacity expansion plans and discuss the impediments to investments envisaged at about Rs 3,00,000 crore by 2011-12. “The minister will meet leading steel producers tomorrow to discuss the reasons behind the increasing demand-supply gap in the sector and take stock of their mega expansion plans. He is also likely to discuss the bottlenecks impeding fructification of major investments in the country as we are envisaging an investment of Rs 2,80,000 crore by 2011-12,” a top steel ministry official said.

The meeting assumes importance as the ministry has also asked the secretaries of mineral-rich states of Orissa, Jharkhand, Chhattisgarh, Karnataka, Madhya Pradesh and West Bengal to be present to apprise themselves of the issues raised by the steel manufacturers and share their views on achieving the envisaged investments, the official said. This meeting is besides the Inter-Ministerial Group (IMG) set up by the government and being headed by Steel Secretary Raghav Sharan Pandey to extensively delve into investment-related issues.

“The minister is particularly concerned that the demand-supply gap has caused 67 per cent rise in steel imports,” the official said. Steel consumption in India is growing at nearly 12 per cent and in view of the anticipated growth in infrastructure and manufacturing sectors, the demand is further likely to grow by 14-16 per cent during the next few years. During April-December 2007, domestic steel demand grew at 12.2 per cent over the same period of previous year.

“However, production has grown at 6.6 per cent in April-December of current financial year. This demand-supply gap has caused a 67 per cent rise in imports,” the steel ministry official said. The official pointed out that for the first time, India became net importer of steel in 2006-07, which has caused some concern, and the government is making all-out efforts to facilitate supply growth by way of faster commissioning of envisaged steel projects — both brown-field and greenfield.

The companies invited to participate in the meeting include Rashtriya Ispat Nigam Ltd, Steel Authority of India Ltd, JSW, Essar, Tata Steel, Ispat, Posco, ArcelorMittal, Bhushan Steel and Power Ltd among others. The steel producers are facing problems in executing capacity-expansion plans, which relate to securing captive raw-material linkage and land acquisition.

For example, Posco, which is keen to set up a 12-million-tonne integrated steel plant at Jagatsinghpur in coastal Orissa, is reportedly unhappy on the opposition in its project site. The Korean steel giant is now said to have made it clear that it may not be able to commence construction work by April.

Similarly, Tata Steel is also believed to be not very comfortable at its site at Kalinganagar in Jajpur district of Orissa.

Paswan to meet steel producers today
Financial Express

Concerned over the demand-supply mismatch in the steel sector, steel minister Ram Vilas Paswan will meet major producers of the alloy on Monday to assess their capacity expansion plans and discuss the impediments to investments envisaged at about Rs 3,00,000 crore by 2011-12.

“:The minister will meet leading steel producers on Monday to discuss the reasons behind the increasing demand-supply gap in the steel sector and take stock of their mega expansion plans. Paswan is also likely to discuss the bottlenecks impeding fructification of major investments in the country as we are envisaging an investment of Rs 2,80,000 crore by 2011-12,”: a top steel ministry official said.
The meeting assumes importance as the ministry has also asked the concerned secretaries of mineral-rich states of Orissa, Jharkhand, Chhattisgarh, Karnataka, Madhya Pradesh and West Bengal to be present to apprise themselves of the issues raised by the steel makers and share their views on achieving the envisaged investments.

This meeting is besides the inter-ministerial group (IMG) set up by the government and being headed by steel secretary Raghav Sharan Pandey to extensively delve into investment related issues. “:The minister is particularly concerned that the demand-supply gap has caused 67% rise in steel imports,”: the official said.

Finding funds for infrastructure
The Hindu

The budget has sought to address the needs of the infrastructure sector both directly and indirectly. It is estimated that the sector would require an investment of $490 billion over the next five years. Given that public spending in this area will continue to be critical, the budget proposals to step up plan outlays for the major infrastructure segments of energy, transport, and communications assume significance. The allocation for electricity has been hiked by about 30 per cent to Rs.93,815 crore for 2008-09 against the revised outlay of Rs.72,230 crore in the current year. A sum of about Rs.5,500 crore has been earmarked for rural electrification under specific schemes. Distribution and transmission reforms are to be speeded up. The government hopes to add the targeted 78,577 MW capacity in the Eleventh Plan. A few more ultra mega power projects, in addition to the three already awarded under public private partnership, are expected to come up. The plan outlays for transport including specific flagship schemes such as the National Highways Development Programme (NHDP) have also been increased significantly. The corpus of the Rural Infrastructure Development Fund, set up in 1995-96 to channelise bank funds to rural infrastructure projects, has been increased to Rs.14,000 crore. For boosting urban infrastructure, more funds are being provided to the flagship Jawaharlal Nehru National Urban Renewal Mission. Significant as these increased allocations are, the announcement on creating an institutional mechanism to monitor some of the major schemes is path breaking.

The announcement on corporate bond market, though in the nature of financial sector reform, has the potential to increase the flow of capital to infrastructure projects. For a variety of reasons, the bond market has remained underdeveloped in this country compared to the government securities and equity markets. Over the past year the RBI and SEBI have modified existing regulations and framed new rules to help evolve a vibrant market in which corporate bonds will be listed and traded on the country’s two principal stock exchanges, the NSE and the BSE. The budget has sought to proceed with the next steps towards creating a full-fledged bond market. There will be no tax deduction at source on bonds traded in the demat form. The empowered group of State finance ministers has been asked to evolve a uniform stamp duty structure for these instruments. Infrastructure projects require long-term funds and in developed countries it is the bond market that provides them. Investors in India looking for a safe long-term fixed income avenue would also benefit from the emergence of the bond market.

Urban Futures
Times of India

Half of the world’s population is expected to turn urban by the end of this year. A UN report now estimates that cities in Africa and Asia will account for most of the growth in urban population by 2050. However, over 45 per cent of India’s population may continue to live in villages, down from the 70 per cent now.

In comparison, only 30 per cent of Chinese are expected to live in the countryside, against 60 per cent now. The growth in urban population is a historical trend and India can’t be an exception. People have historically moved from rural areas to urban enclaves due to social and economic reasons and aspirational factors. Cities generate more jobs than villages, especially in the organised sector. They have good schools and hospitals, diverse markets, vibrant cultural spaces and are assumed to offer a better quality of life. People naturally prefer to migrate to cities when given the opportunity. The flip side of this trend is that cities can get overcrowded and stretch public utilities. Many Indian cities face this prospect. One way to address this problem is to incentivise reverse migration so that our overcrowded cities are decongested, besides, of course, upgrading the facilities in urban centres. Reverse migration is now a realistic proposition due to social and economic changes and emergence of new forms of technology.

Our democratic institutions are now more representative and inclusive thanks to Panchayati Raj. Women and lower castes have a visible presence in local government. Social oppression that forced many people to flee villages to cities is on the decline in most parts of the country. The IT revolution is changing the concept of work and workplace. Many non-metros have benefited from these changes. As local economies grow in size markets too will diversify and more jobs will be created in and around these cities. More small towns could reap the benefits of the emerging economy if local governments pursue the right policies. The task before the government is to make policies to ensure that urban amenities presently available only in big cities reach small towns and even villages. States like Kerala and Tamil Nadu have demonstrated that this could be achieved. These two states have built a seamless network of small towns and villages well connected by roads and communication links. As the Budget has revealed India does not face shortage of capital.

The task is to ensure that resources are deployed in the right manner. An urbanised population spread more evenly over a large number of cities would be a better option for the future than a handful of overcrowded mega cities.