Steel items won't match global norms till August
The government’s plan to introduce mandatory Bureau of Indian Standards (BIS) certification for a slew of steel products seems to have hit a road block again.
By Subhash Narayan, ET Bureau |
NEW DELHI: The government���s plan to introduce mandatory Bureau of Indian Standards (BIS) certification for a slew of steel products seems to have hit a road block again. The Centre has decided to hold back implementation of the global practise in the domestic steel sector, fearing the move would fuel inflation as it may squeeze supplies and push up prices.
It has been decided the situation would be reviewed again in the last week of August before a final decision is taken on introducing mandatory certification of steel products.
���The BIS certification was to be introduced in mid-May, as decided by the steel ministry earlier and endorsed by the consumers affairs ministry. However, spiralling inflation has delayed the programme again and it has been decided to postpone its implementation at least by three months,��� an official source said.
The ministry of steel in late 2006 decided to introduce mandatory BIS certification for steel products, after a reference from the consumer affairs ministry. The ministry proposed to bring standardisation in the market and ensure quality to consumers. As per the proposal, it was decided that 16 BIS standards would be applicable on four categories of steel products. These would include ingots, billets, blooms and slab for re-rolling; structural steel, concrete reinforcement steel; steel plates and sheet products; and tinplate for storage and cooking of food products.
The matter first got into procedural complications and then ran into stiff resistance from small and medium steel companies which felt that adherence to standards would increase their cost and, in some cases, lead to closure of units. However, the steel ministry managed to arrive at a settlement with companies and it was decided that companies would be given time to adopt the changes.
���Even though companies were given adequate time to gear up to the new changes, none seem to be prepared to undertake the government���s standard testing. If we force the standards now, several units like those using induction furnaces or producing low-grade saria or tor steel would have to close down. This could create temporary scarcity in the market and fuel inflationary pressure by pushing up steel prices further,��� said the source.
Though the BIS standards are planned to be introduced in August, it is likely to get delayed. The new norms are being introduced keeping in mind fast integration of the domestic steel industry with global markets. In several parts of the globe, quality certification is a mandatory aspect of production.
It has been decided the situation would be reviewed again in the last week of August before a final decision is taken on introducing mandatory certification of steel products.
���The BIS certification was to be introduced in mid-May, as decided by the steel ministry earlier and endorsed by the consumers affairs ministry. However, spiralling inflation has delayed the programme again and it has been decided to postpone its implementation at least by three months,��� an official source said.
The ministry of steel in late 2006 decided to introduce mandatory BIS certification for steel products, after a reference from the consumer affairs ministry. The ministry proposed to bring standardisation in the market and ensure quality to consumers. As per the proposal, it was decided that 16 BIS standards would be applicable on four categories of steel products. These would include ingots, billets, blooms and slab for re-rolling; structural steel, concrete reinforcement steel; steel plates and sheet products; and tinplate for storage and cooking of food products.
The matter first got into procedural complications and then ran into stiff resistance from small and medium steel companies which felt that adherence to standards would increase their cost and, in some cases, lead to closure of units. However, the steel ministry managed to arrive at a settlement with companies and it was decided that companies would be given time to adopt the changes.
���Even though companies were given adequate time to gear up to the new changes, none seem to be prepared to undertake the government���s standard testing. If we force the standards now, several units like those using induction furnaces or producing low-grade saria or tor steel would have to close down. This could create temporary scarcity in the market and fuel inflationary pressure by pushing up steel prices further,��� said the source.
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Though the BIS standards are planned to be introduced in August, it is likely to get delayed. The new norms are being introduced keeping in mind fast integration of the domestic steel industry with global markets. In several parts of the globe, quality certification is a mandatory aspect of production.
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