When the government-owned Steel Authority of India Ltd scrambled on Tuesday to promise a price freeze for “at least two to three months”, its bosses had not been told to do so by Prime Minister Manmohan Singh.
After all, the prime minister, flagging off the modernization and expansion of SAIL’s Bokaro plant shortly after noon, had not said anything strong on the steep uptrend in steel prices over the past few months.
Indian steel producers have increased prices twice in February and once in March, and carbon steel is now selling at Rs 50,000 a tonne against Rs 29,000 before the price increases. The price hikes had prompted talk of a regulator for the industry.
Dwelling mostly on development issues relating to his host state Jharkhand, Singh’s only comment on steel was: “The steel industry is progressing but it has to progress more so that we can meet the increasing demand.”
But SAIL’s cue came from the sharp comments in the printed copy of Singh’s speech in Hindi— most of which he delivered later in the afternoon at Jamshedpur at a function hosted by Tata Steel.
Translated, the printed copy of Singh’s speech in Hindi aimed at the Bokaro audience read: “I request our steel producers and traders not to take unfair advantage of the situation.”
“Our government will take all steps to control steel prices,” the written speech said, adding: “Industry should think of the long-term. If you can increase capacity and production, then producers as well as consumers will gain.”
“We should avoid short-term gains,” the speech noted.
As the message seeped in, SAIL got further confirmation from Singh’s comments at the Tata function.
Prompt came the SAIL statement: “SAIL has given an assurance to the Prime Minister that in spite of the pressure of rising input costs, SAIL shall continue to hold the price line for two to three months or so.”
SAIL said it has also promised the Prime Minister that it is taking all steps to improve production as well as improve efficiency parameters.