The Hindu Business Line : Steel sector too may get sops given to infrastructure projects

THERE may be some good news for companies planning to set up new steel capacities. Fiscal incentives such as tax holidays, easier norms for external commercial borrowings, and facilities to develop ports and berths are likely to be made available to the steel sector once the Government is able to put in place the National Steel Policy.

The proposed policy, on which the Committee of Secretaries (CoS) has to take a view before it is placed before the Cabinet, has made provisions for extending the fiscal incentives till now available to infrastructure projects to the steel sector as well in order to mobilise resources required to increase domestic production capacity of steel from the present 36 million tonnes to 110 million tonnes by the year 2020, officials said.

According to estimates available with the Ministry of Steel, the total outstanding exposure of the banking sector to the steel industry at the end of fiscal 2003-04 stood at Rs 26,295 crore.

In order to achieve the strategic goal of 110 million tonnes of steel production by 2019-20, the industry would need an additional capital of around Rs 2,30,000 crore only for capacity creation.

In addition, funds would be required for technological upgradation of the existing facilities.

Attracting FDI

Officials said that since it would not be possible to mobilise such vast amount of resources domestically, special efforts would be initiated to attract foreign direct investment in this sector.

Though already 100 per cent foreign direct investment through the automatic route is permitted in the steel sector and several global steel majors have announced their plans to set up big primary steel plants in India, further efforts would be initiated for speedy implementation of the announced plans and make the country a preferred destination for multinational steel companies for setting up new capacities, officials said.

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