Vote on Account 2014: Coal block allocation, easy land acquisition to benefit common man

From 2004-2008, Indian iron and steel industry saw a rapid growth. The industry benefited from the strong demand for steel in US and China, which led to sharp rally in the global iron and steel prices, benefiting the Indian steel manufacturers.

From 2004-2008 was a very good period for the steel industry. But, the global meltdown 2008 hit the Indian steel manufacturers hard. Falling steel prices and falling demand impacted the topline as well as bottom line of these companies. After the global slowdown from 2008 onwards, the focus of most of the companies shifted to India as Indian economy was still doing well relatively.

However, this did not benefit much as Indian GDP also started declining. In addition the iron ore mining got banned in states such as Karnataka and Goa to stop the illegal mining, which created more problem for the steel companies. The huge debt that has piled up with the companies started facing trouble. This led to a lot of companies file for corporate debt restructuring.

How last 10 years has impacted the common man?

In the last ten years, the rapid growth in the steel and mining industry has created a lot of employment. At present, it employs more than 2 million people (directly and indirectly). Higher steel production has helped India recently become a steel exporter from a steel importer, which is a positive for the fiscal deficit and can have several indirect benefits for the common man.

What should the new leadership do in the iron and steel industry to benefit the aam-aadmi?

To help Indian steel industry grow further to benefit the aam aadmi, government should do proper coal block allocation to the steel manufacturers and easy land acquisition for Greenfield projects would be critical. Delay in allocating coal blocks is hurting the industry. The same story is with iron ore. Else, this will slow down the new investment. Also, the government should intervene and make the land acquisition easier for Greenfield projects in a manner which is win-win for both – the aam aadmi and the corporates.

In addition, the new government should also spend on infrastructure which will further boost the steel industry and help in creating employement.