In a communication to the Industrial Development Bank of India (IDBI) chairman, steel secretary AK Basu said FIs should also consider rescheduling loan repayment to give upcoming steel plants longer repayment time. This was necessary given the current sluggish markets and the need to ensure that the ongoing projects went on stream as early as possible, he added.

Appreciating that FIs would necessarily have to carry out due diligence for new projects awaiting appraisal, Basu, however, said that since the long- term projected demand for steel remained attainable, FIs funding for some more capacities in the long-products category may be justified.

Basu said IDBI's own review of the industry carried out last year had projected higher figures than those adopted for the NinthPlan.

According to a steel ministry release here on Friday, Basu in his communication said that there were 19 new major steel projects, representing an aggregate capacity of around 13 million tonnes and an investment commitment of over Rs 25,000 crore.

Of these, five were operational, representing an incremental capacity of around 3.5 million tonnes. Eleven projects of nearly nine million tonnes capacity were under implementation and at least five more with a proposed capacity of five million tonnes were awaiting financial appraisal.

According to Basu, all these facts showed that the steel sector had responded magnificently after its opening up.

Referring to the current slowdown in the sector, Basu said these recent developments were temporary. He said his department was confident this trend would soon be reversed as the government had announced some major infrastructure investment and large-scale construction activities. These were signs of an industrial revival in the capital goods sector, headded.

Basu also hoped that the iron and steel industry would receive some relief in the form of lower duty on imports of raw material and from steel dumping.