Sat. Feb 29th, 2020

Understanding contributions of Iron and Steel industry to India’s growth story in IT era

steel industry

A still image from the TV commercial

By Ankit Pattnaik

Remember those punch lines of old television advertisements of the Indian Steel Association (ISA) and the Steel Authority of India Limited (SAIL). “The magic of steel… it’s everywhere.” Also, the line: “There is a little life in every steel and there is a little bit of SAIL in everybody’s life.” These statements are so relevant even today. 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.

India is a global hotspot for IT and allied services today. It has come a long way and still has to achieve a lot in terms of technology. However, it’s almost impossible to imagine the IT  industry of India without counting its industrial revolutions of the last century. 

During the colonial period, India was the gem in the crown of the mighty British Empire – fostering their prosperity, economy and rule in the Indian sub-continent for almost 200 years. The British exploited Indians and the Indian economy to develop the British economy. The Indian economy was devoid of any progress owing to the ‘Drain of Wealth’ theory very well postulated by Dadabhai Naoroji, popularly known as the ‘grand old man’.

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, the visionaries and intellectuals then did feel that industry sector too needed parallel developments. Basic infrastructure like effective transportation, communication, banking & finance and qualified & skilled human resources formed the foundation for the growth of the economy.

Steel Industry
An old image of a Steel Melting Workshop of Rourkela Steel Plant

The eastern part of India is replete with all sorts of mineral resources, particularly the Chota Nagpur Plateau region (Jharkhand), Odisha and parts of Chhattisgarh and West Bengal. Steel and allied industries like cement, fertilizer, sponge iron, metallics, glassworks, 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 industrialization. During this period, hydroelectric power projects along with iron & steel plants were established. Among these plants, SAIL was set up by the Government of India.  SAIL has plants in Bhilai (Russian collaboration), Rourkela (West German collaboration), Durgapur (British collaboration), Burnpur, 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 just 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 robust growth 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. However, the sector got a push afterwards bringing back the growth momentum. Thanks to the growing focus of the government on the domestic infrastructure. 

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 galvanizing 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.

One can easily find a multi-cultural society in these cities. People from all walks of life and from all corners of India live in these steel townships. In fact, these steel plants invest heavily on improving the social conditions of residents 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. Role of steel is crucial in the development and growth of any economy and is considered to be the backbone of human civilization. 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.

The Author, Ankit Pattnaik, is a young journalist, who has worked with reputed media houses like NDTV and Indian Express. He was born and brought up in Rourkela, which has one of the largest steel plants in India. 

Leave a Reply

Your email address will not be published. Required fields are marked *