Business Standard : Private steel firms asked to move to rural areas

Industry News 2010-03-26 11:49:10

 Source: Business Standard / Nayanima Basu / New Delhi

Published : March 26, 2010


The government has directed private steel manufacturers such as Tata Steel, JSW and Essar to aggressively increase their presence in rural areas of the country through their dealer networks due to an increasing demand for steel products there for infrastructure development.


Steel public sector undertakings (PSUs) SAIL and Rashtriya Ispat Nigam Ltd (RINL) had been expanding their presence in the rural markets at a rapid pace ever since the ministry had set the objective of making available at least one dealer in each district. SAIL has 1,963 dealers across 599 districts, while RINL has dealers in the districts of Andhra Pradesh, Tamil Nadu, Karnataka, Kerala, Orissa, Chhattisgarh and Maharashtra.


“Besides the PSUs, we have also requested the private sector to increase the number of outlets and make the products as much nearer possible. We must remember SAIL and RINL are not the only players; there is the private sector as well. Branded products of SAIL and RINL are not available in the sub-districts level but secondary steel producers who produce TMT Bars and other items are present in remote rural districts significantly. However, if the integrated steel producers can have more penetrative presence then it will help. Our objective is that products should be available and as close as possible,” a senior ministry official told Business Standard.


The National Steel Policy has also set the objective of promoting steel with particular emphasis on rural areas, thereby creating widespread awareness about socio-economic usages of steel. According to the policy, per capita steel consumption in rural areas is likely to touch 4 kg per annum by 2019-20 from 2 kg at present.


The strategy would be to create incremental demand through promotional efforts, creation of awareness and strengthening the delivery chain, particularly in rural areas. Special steel products suitable to the needs of the rural sector also have to be produced,” the official added.
The government is also mulling integration the steel plants and mines with the highways development-related programmes, particularly rural road schemes for large-scale expansion of delivery chain of steel in the country.


The Ministry of Steel is currently conducting a survey based on the recommendation of the Parliamentary Standing Committee to assess and evaluate the demand for the commodity in rural areas, with particular reference to several infrastructure development programmes such as Bharat Nirman.The Eleventh Five-Year Plan (2007-12) has also emphasised on the importance of usage of steel in the country, especially in the rural areas, that will result in economic growth and development and rising income levels in the household sector.





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