How iron and steel industry contribute to India’s growth story
By Ankit Pattnaik
Remember those punchlines from old television advertisements of the Indian Steel Association (ISA) and the Steel Authority of India Limited (SAIL). “The magic of steel… it’s everywhere.” “There is a little life in every steel and there is a little bit of SAIL in everybody’s life.” It is so meaningful to us and to India. Indian iron and steel industry has contributed in more than one way to the building of a self-reliant and confident nation that India is today. Here is a feature on the journey of the Indian iron and steel industry.
During the colonial period, India featured as the jewel among all the British colonies – fostering their prosperity, economy and rule in the Indian sub-continent for almost 200 years. The British exploited the Indians and the Indian economy so as to develop the British economy. The Indian economy was devoid of any progress owing to the ‘Drain of Wealth’ theory very well postulated by the grand old man of India, Dadabhai Naoroji.
Post-independence, the scenario changed gradually. The newly independent India had a very poor economy – with poverty, hunger and malnutrition being the primary cause of concern. After the implementation of the first Five Years Plan (FYP) on agriculture, the Nehru government shifted focus towards ‘heavy industrialisation’ during the second FYP to foster employment in the public sector.
Though India at that time was an agrarian economy, it was decided that industry sector also needs to be developed hand-in-hand with agriculture. Basic infrastructure like effective transportation, communication, banking & finance and qualified & skilled human resources formed the foundation for the growth of the economy.
The eastern part of India is replete with all sorts of mineral resources, particularly the Chhota Nagpur Plateau region (Jharkhand), Odisha and parts of Chhattisgarh and West Bengal. Steel and allied industries like cement, fertiliser, sponge iron, metallics, glass works, marble works have also developed gradually with respect to the implementation of FYP – monitored by the Planning Commission of India which was replaced by the NITI Aayog (National Institute for Transforming India) in 2014.
The second FYP spanning from 1956-61, targeted rapid industrialisation. During this period, hydroelectric power projects along with iron & steel plants were established. SAIL (Steel Authority of India Limited) was the public-sector organisation that has plants like Bhilai (Russian collaboration), Rourkela (West German collaboration), Durgapur (British collaboration), Bumpur, Salem, Vishakhapatnam, Bokaro and Visweswaraya near Mysore. The private-owned TISCO is the oldest steel plant in India.
In 2014 and 2015, India was the third largest producer of raw steel and the topmost producer of sponge iron in the world. The finished steel production in India has grown significantly from a mere 1.10 million tonnes in 1951 to 42 million tonnes in 2006. In India, iron and steel are freely exportable. In the years 2010-11, India exported about 3.64 million tonnes of steel; again, in 2011-12 it rose to 4.59 million tonnes. 2012-13 and 2013-14 did not see a sharp rise in exports of 5.37 and 5.98 million tonnes respectively. The exports declined in the year 2014-15, falling to 5.59 million tonnes; mainly, because of the competition from China.
Besides their direct contributions, many steel plants have also indirectly contributed to the socio-economic development of the nation. Millions of people get direct as well as indirect employment. They give rise to the boom of other industries such as steel rolling mills, cement factories and galvanising plants among others. Some of the above plants have incredible involvements in the making of some small but beautiful townships/cities like Rourkela, Bhilai, Durgapur, Jamshedpur and Bokaro.
Almost every steel city or town seems is like a mini-India. In fact, these steel plants invest heavily on improving the social conditions of residents around the vicinity by setting up schools, colleges, skill development programmes, hospitals, recreational centres and setting up of other infrastructure.
Today, while looking around, one cannot imagine a world without iron and steel. Homes, offices, shopping centres, roads, railways, and airports wherever our eyes set in – steel is ubiquitous. The role of steel is crucial to the development and growth of any economy and is considered to be the backbone of the human civilisation. The socio-economic development and living standard of people can be indicated through the level of per capita consumption of steel.
Domestically, the growth rate of total steel production has grown by 7 % annually over the last fifteen years. The projected growth rate of 7.3% per annum in India can be correlated well with the projected national income growth rate of 7-8% per annum, given an income elasticity of steel consumption of around one.