This is mainly because much of the steelmaking capacity had been set upbased on over-optimistic demand projections. The projections did not takeinto account the possibility of an industrial slump, which is quite naturalto business cycles and generally affects a liberalised economy.

Indian steelmakers have been used to a sellers market. Today, due to thelarge addition of capacity, supply is no longer a problem. Thus, steelprices have come under pressure. This in turn has reduced the profitabilityof the industry. Some steelmakers even incurred losses. The country'slargest steelmaker Steel Authority of India Ltd, for example, suffered aloss of Rs 1,673 crore in 1998-99. This government-owned company is expectedto incur even higher loss of around Rs 2,500 crore this fiscal.

Apart from excess supply, much of the projected demand for steel did notmaterialise. Many steelmakers had expected that with the partialliberalisation of the financial sector, funds could flow into infrastructureand construction sectors. But, this did not happen largely because of thepolitical uncertainty prevailing in the country since 1995. Mega projectsdid not take off. Private funds shied away from investments. And thegovernment exchequer no longer permitted large-scale deployment of resourcesin infrastructure.

Indian steelmakers faced demand recession in two ways. First, investments ininfrastructure projects were deferred. Second, industrial recession reducedthe demand for steel. The slump in the consumer durable and capital goodssector, a shift in the growth from the manufacturing to the service sectorand the deceleration in agriculture (the largest contributor in grossdomestic product) all contributed to an overall slowdown of the economy.

The glut in steel availability in the country could not be alleviated byexport as the international market was also in a state of over supply,particularly with the slow down in economic activity in east and south-eastAsia. The surplus steel floating around found its way into India atunreasonably low prices.

While most producers tried to push up volume of sales, this was achieved atthe cost of lower realisations. Consequently prices took a downtrend plungeand that remained a major concern for the steel industry.

This is how the monograph under review summarises the problems faced by thesteel industry. But why this retrospection? Replies development commissionerfor iron and steel and chairman of Joint Plant Committee RK Prasannan in theForeword: The simple answer lies in the wisdom of the oft-quoted statement:"Most men look at future through the rear-view mirror."

The monograph contains 23 chapters which deal with state of Indian economy,technological status of steel plants, raw materials and their reserves,infrastructure, production performance, import and export scenario, analysisof consumption, price trends - domestic and international, strategy fordevelopment, future demand for steel and many other issues related to steelindustry.

Prasannan says the monograph is "a humble contribution in keeping with ourrole of defining the context and not managing the content". The monographobserves: "So far, devaluation of the Indian rupee provided an importantshield to the relatively inefficient Indian producers. However, with theprogress of liberalisation such covers may not always be available." Hence,it believes, technological improvement and operational efficiency willprovide Indian steelmakers necessary cutting edge in the deregulated steelmarket. It has suggested that indigenous producers should be provided withadequate institutional and legal safeguards to protect them from extremelylow-priced imports.

It seems that with a stable Government at the centre, Indian industry is onthe threshold of a new era of rejuvenation and sustained growth. The authorsof the monograph believe: "The amazing breadth and depth of steel sector interms of production pattern, choice of technology and the acquired levels ofskill, give it the necessary resilience to become a front-runner in thesteel producing fraternity."

The monograph provides an insight of problems faced by Indian steel industryand would be a ready reckoner for interested people.