Attributing poor steel consumption to subdued economic growth, the Steel Ministry on Monday said that buoyant housing and rural sectors are expected to spruce up demand in the coming days.
Elaborating its plan to Parliamentary Committee on Coal and Steel, headed by Kalyan Banerjee, the ministry said the government’s infrastructure push too would raise consumption, said a source.
“At the meeting of the Parliamentary Committee on Coal and Steel, the focus was on promoting sales of steel. Steel Ministry said sales were not good last fiscal as the economic growth was subdued,” the source said.
The ministry, however, exuded confidence that sales of the metal would go up in the coming days with more consumption coming from housing and rural sectors.
“More demand would come from housing and rural sectors in the days ahead. We will also promote sales in these two areas. Besides, infrastructure is also going to give a huge push to demand,” the source said, quoting the ministry’s proposed initiatives to boost sales.
India’s steel consumption grew 3.3 per cent, lowest in three years, to 73.3 million tonne in 2012-13 on subdued demand due to slackening economy and high interest rates. It grew by 5.5 per cent in 2011-12 and 9.9 per cent in 2010-11.
Indian economy grew by five per cent last fiscal. The government expects it to clock six per cent growth in 2013-14.
Broadly, steel consumption of an economy grows by 1.2 times of the GDP. Though it did not happen for India in last fiscal, government officials believe it could actually happen this time around.
India’s per capita steel consumption is just around 60 kg, as against the world average of over 210 kg, and 460 kg in China.