Inconsistent policies and apathetic attitude of the government towards PSM’s myriad problems lead almost to a standstill in productivity.
While the government is not clear whether to privatise the Mill or to restructure it, , the gap between domestic demand and supply of steel continues to widen, leading to huge imports.
Owing to high demand for construction,civil engineering, automotive and mechanical engineering as well as energy projects, growth in steel demand is projected at 8pc per annum. From 6.84 million tonnes per year in 2004-05, the demand is likely to increase to about 10MTPY in 2015.
The current annual installed capacity of steel products is about 4.9MTPY, and the supply-demand gap is bridged through imports. In 2011, imports of iron and steel amounted to 3.2 million tonnes, costing $2 billion. With the virtual closure of PSM, reliance on imports has increased, and this trend is likely to continue unless the govt. takes practical steps to revive its largest production facility.
