The Hindu Business Line : ‘Industry should avoid short-term gains’

Jamshedpur, April 22 The Prime Minister, Dr Manmohan Singh, on Tuesday advised the steel industry to avoid falling prey to the “temptation of seeking windfall gains from market manipulation in a period of excess demand”.

Industry and trade should “eschew short-term gains that hurt consumers and disrupt the stability of the process of economic growth”, he said in the context of rising steel prices.

Addressing the centenary celebrations of Tata Steel here, Dr Singh said the consumption of steel in India was still below that of many industrialised nations. As such, there was vast potential for growth in the years ahead. “The Indian economy will grow and the demand for steel will continue to grow,” he said.

Dr Singh presented a strong case for industrialisation and said it was necessary to provide gainful engagement to those who were no longer able to earn a living out of agriculture. “Industrialisation provides a way out of the process of agrarian change and agriculture development,” he said.

Over the past 25 years, the share of agriculture in national income had come down due to the rapid growth of new industries and the services economy. However, there has not been a commensurate decline in the share of population dependent on agriculture.

The Prime Minister said industrial activity in States like Jharkhand must be encouraged, such that jobs are created for the people. “I would like to see the ripple effects of growth in Jamshedpur to be felt even more visibly in an even wider region around. Today, as we enter a new phase of industrialisation, we need new centres that can create jobs and promote new industries,” he said.

The Centre had put in place a “humane industrialisation policy” where the focus was on creating employment and yet ensuring that no section of society was “displaced or dispossessed by the process of industrial development”. In this regard, he said the youth of the country should be equipped with skills that would open doors for new employment opportunities.

“I have invited the private sector to be a partner in this process of skills creation and empowerment of our people”, he said.

In his address, the Managing Director of Tata Steel, Mr B. Muthuraman, said the prices of raw materials required by the steel industry, as also freight costs, had surged to unprecedented heights. Availability of raw materials on a sustainable basis was also a major issue.

“In a scenario like this, apart from exercising self-restraint on steel prices amidst rising input costs, which SAIL and Tata Steel are practising, albeit with self-imposed difficulties, the only sure way to contain steel prices is to urgently create new steel capacities in India matching or even exceeding the fast pace of demand growth unleashed by our liberalised economy,” he said.

Present on the occasion were Mr Syed Sibtey Razi - Governor of Jharkhand, Mr Ram Vilas Paswan - Union Minister of Steel, Mr Madhu Koda - Chief Minister of Jharkhand, Mr Jitin Prasada - Union Minister of State for Steel, and Mr Jyotiraditya Scindia - Union Minister of State for IT & Communications.

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