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Tuesday, Sep 14, 2004

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Govt favours seven task forces for steel sector

Ambarish Mukherjee

New Delhi , Sept. 13

THE UPA Government's penchant for setting up task forces and core groups appears to be overwhelming. For the steel sector alone, it wants to set up more than half-a-dozen task forces and another core group. According to the Draft National Steel Policy 2004, which would be announced in October, the Government wants to set up one core group and seven task forces for the all-important steel sector in the coming days.

The core group, it was suggested, will look into the possibilities of expanding the use of steel in large construction projects such as Golden Quadrilateral, North-South-East-West corridors and the rural feeder road scheme. The group will also closely co-ordinate with various agencies involved in the investment and implementation of infrastructure projects.

Next comes the battery of task forces. First, it was suggested that area-specific task force will be set up to facilitate communication between the producers and consumers.

Secondly, it was suggested that another task force would be set up to study the special needs of steel exporters, including the feasibility of securitisation of steel exports and the creation of a dedicated steel export guarantee fund.

A third task force is planned to assess the long-term requirements and map the existing reserves of major minerals, including coal and iron ore, and suggest changes in the mineral policy to mobilise investments for exploration, mining and beneficiation of indigenous resources.

The fourth task force, according to the policy draft, will assess the requirement of infrastructure such as inland transport, bulk handling of materials and other facilities at ports, storage facilities at different points of the supply chain and then suggest ways to meet the needs of the industry in future.

Next follows a task force that will act as a facilitator of the industry with the Government to explore the possibilities of bilateral trade and exchange arrangements for essential inputs.

The sixth task force will suggest to the authorities concerned an appropriate and special pricing formula for natural gas to sponge iron units. This is in view of the units' dependence on natural gas as an essential input/feedstock as opposed to being just an alternative energy input.

Then comes the seventh task force and probably the most important one. This will guide the Government in disinvestment of ownership in public sector steel units.

Interestingly, the draft policy does not mention any timeframe for setting up the task forces.

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