Brace for the steel glut
This is in reference to the edit “Steeling the industry” (April 17). India is expected to become the world’s second-largest producer of crude steel in FY16,as its capacity is projected to increase from 100 million tonne (mt) to about 112.5 mt in the current fiscal year, and 140 mt by the end of 2016. India has ore reserves of 13,000 million tonnes, a stock of about 25 years beyond 2030. Fines, hence lower the iron content, will have to be increasingly mined in future. The high price of gas is a disincentive to pelletise the fines through direct reduction and what we do produce are mostly exported instead—that leaves the domestic steel industry no better. Steel growth is today 8% annually and could taper down gradually based on global demand. Thus our coking coal reserves can last another 80 years. Water will be the greater problem. Blind capacity addition would leave us in a fix. The present per capita steel consumption in India is 50 kg, going up to 120/150 kg by 2030. Putting in excess production capacities without matching appetite for steel, both domestically and globally,would result in huge surpluses. The crux of steeling India lies else where. This has to be our leap-frogging in the sphere of R&D. We must produce steel engineered for the future and not be left later making run-of -the -mill products. That would mean idling plants and inventories that we may never be able to sell.
R Narayanan, Ghaziabad
This refers to “Big Marriage Index” (April 18). The Japanese young are postponing marriages due to high unemployment rate, and the aged population dependent on young people outnumbers the productive young people. In one more generation, this could be true for India also. In China also, due to enforcement of the one-child policy, the number of the greying is increasing. High unemployment rates among the youth is not the only cause for the scare, the sky-rocketing real estate prices are also another reason. The problem will become more acute when the working young of today become old. Uneducated but skilled people like cobblers, plumbers and electricians in the US earn more money than the average school-teacher—the earnings can be in five-digit figures—where as in India, the skilled but uneducated worker has to become a part of the informal economy.
Deendayal M Lulla, Mumbai
There are many reasons why the Rafale deal Modi struck with the French government is detrimental to India’s interests. As you have pointed out, it is a kiss of death for Make in India. Besides, G2G, though touted as a clean process is never really so. Just look at the numerous defence purchase scams. Do we want a recurrence of the Bofors or similar scams? One may argue that in this case, we are the buyer with no control or influence over the supplier. But what about when we are at the supply end of things?
Prahlad Bhasin, Mumbai
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