Editorial – January 2023
I had said in my last piece that the Indian steel industry has learnt to survive and grow despite of Ukraine – Russia war and overall recessionary trend in many parts of the world. This is mainly because of the growing consumption in the country and less dependence on overseas trade. India’s GDP growth rate is the highest among the large economies and all the major international monetary agencies have predicted a decent GDP growth rate of more than 6 % for the fiscal 2023-24. This means that Indian economy would grow faster than China, the US and also the other major countries having large sized economy.
Recently the union finance budget was announced by the Indian Finance Minister Nirmala Sitaraman. It has more than 30 % more outlay for infrastructure development, a big provision for the development of Railways and also numerous schemes for MSME sector. Thus it was perceived that the budget will give a forward push to the economy and was very well received by the industry. The steel fraternity thought that the enhanced outlay for the infrastructure and development of railways is sure to translate into huge steel demand. This will not only ensure a sustained growth for steel producing companies but also create jobs, direct as well as indirect. Further, the development of railways, apart from creating steel demand, also includes its modernization program. We can expect a more efficient and modern railway service in coming years. MSME is supposed to be the backbone of any economy. The budget promises to strengthen this crucial sector and improve its bottomline and viability. We all know that MSME is the biggest job creator in any economy and if it is healthy and growing, it can give a big boost to the economy wheel. Also a lot of fund has been allotted to logistics development. This will also directly benefit iron & steel sector as the logistics plays a very important and major role in this industry. To produce a tonne of steel, three tonnes of raw materials have to be moved. Thus the total transport requirement per tonne of steel is around four tonnes. Thus it is natural that all the major trade bodies and also the major steel business houses have wholeheartedly welcomed this union budget.
Overall, the fortune seems to be favouring Indian economy and also Indian iron & steel sector. Here I would again like to mention that infrastructure development occupies majority of space in any economy’s growth and the steel sector is at the centre of the infrastructure development. Thus ‘India’s Growth Story’ can not be completed or fully achieved without a strong support from steel industry. So friends, it is time to work hard and achieve a sustainable growth, for ourselves and also for the country !