The Union Budget 2016-17 has a strong focus on infrastructure and the social, rural and financial sectors and the large infrastructure outlay of Rs 2.21 lakh crore is expected to result in higher steel consumption in India, Dr Sanak Mishra, Secretary General of the Indian Steel Association (ISA) said.
ISA hopes that much of that consumption would be from domestically produced steel, Mishra said.
Over the last year, the Indian Steel Association has asked the government for several measures to boost the steel industry which has been under tremendous pressure from large volumes of cheap imports. The minimum import price on steel products announced by the government at the beginning of February this year will give some relief to the steel industry.
However, the industry needs larger support from the government for its survival and sustainability. Therefore, the steel industry looks forward to a government policy for the mandatory use of domestically produced steel in the infrastructure sector.
Dr Mishra also said the 100% increase in clean energy cess from Rs 200 to Rs 400 will increase the input cost for steel producers. Also, duty-free exports of iron ore (below 58% Fe grade) may lead to higher domestic prices of iron ore which is a major raw material for the steel industry.