PM's speech on the occasion of laying the foundation stone ofmodernisation and capacity expansion of IISCO Steel Plant at Burnpur, WestBengal
***
I am delighted to be here today at Burnpur to begin work on the expansion ofIISCO’s steel plant. Burnpur occupies a historic place in the saga of theIndian steel industry. It was here, at Kulti, that the first modern iron-makingunit in the country was started more than a century ago. It was here, in Bengal,that the industrialization of India began. We have come a long way from thosemodest beginnings. India is once again marching ahead in the field of industry.Today, we have a manufacturing sector which is growing at an unprecedented rateand the prospects for the steel industry mirror the excellent prospects for thecountry as a whole.
West Bengal was in the vanguard of India’s initial charge for industrialdevelopment. There was time when the Bengal-Bihar coal and steel belt wasexpected to become the Ruhr Valley of India. The State, however, has fallenbehind the more developed parts of the country on the industrial front in thelast quarter century. It cannot continue to slip up in this regard. It must jointhe march of progress and benefit from the rapid economic growth of the country.The time has come for a new era of industrial development in West Bengal. I hopethe expansion of this steel plant here in Burnpur will mark a new beginning forWest Bengal. West Bengal needs modern industries, and the jobs that come withit. It needs a process of industrialization which is employment intensive,welfare enhancing and on the whole, humane and just. Every section of societyshould benefit from the spin off benefits of industrialization.
The growth of the iron and steel sector is a fair indicator of the industrialprogress of a nation. By this measure, we still have a long way to go incatching up with the newly industrializing economies of Asia. Today, the steelconsumption in China is ten times that of India. We have to move fast, movequickly and move efficiently to catch up with our neighbours in East Asia. Itcannot be business as usual any more. We have to give up our "chalta hai"laid back attitude.
It is indeed ironic that an Indian businessman is today called the "Steel Kingof the World". Lakshmi Mittal started his business career here in West Bengal.Today, his group is the world’s largest steel producer without producing akilo of steel in India! Why is it that so many Indians do so well when theirenterprise and creativity is allowed to blossom? Why is that they choose foreignshores for growth and expansion rather than their home turf? Why does LakshmiMittal or Ratan Tata have to buy foreign companies to establish a globalpresence and expand steel capacities when our per capita consumption of steel isso low and when there is so much opportunity here? We need to introspect on thisdeeply. Is it to do with our industrial environment, our procedures, ourbureaucracy and red tape that entrepreneurs shun domestic opportunity.
The time has come for us to take a hard look at what we must do to build astronger India. India’s strength is not determined by the size of our armed orin the number of nuclear weapons we have. Our strength lies in the capabilitiesof our people; in the opportunities that we can provide for them to demonstratetheir skills and excel in enterprise; in our ability to build a modern economythat can provide jobs for all. Our strength will lie in the competitiveness ofour industry; in our ability to produce enough food for our people; in ourability to generate enough electricity for our needs. Our strength will lie inour ability to create a knowledge-based economy with full literacy; in ourability to rid our nation of poverty, ignorance and disease. These are thechallenges before us. We need steel in our resolve, as much as we need steel inour economy.
Our current low level of steel consumption is, however, an opportunity. As oureconomy grows faster, as infrastructure development moves forward and asagriculture modernizes, the demand for steel will rise. The challenge before usis to ensure that the steel industry grows not only to meet this demand but alsobecomes a major exporter.
However, if we have to meet this demand efficiently and at reasonable cost, thesteel industry must modernize. In steel manufacturing, we have certain strategicadvantages. Good quality iron ore is available domestically. Our manufacturingcosts are internationally competitive. The increasing number of global steelmajors who have announced plans to set up steel-making facilities in India givesa fair indication of the comparative advantages of manufacturing steel in ourcountry.
In line with our overall plans for the country’s economic growth, theGovernment announced a National Steel Policy last year with a production targetof 110 Million Tons of steel by 2020. However, it looks as if the target wouldbe considerably surpassed. I understand that present assessments indicate thatour steel-making capacity is all set to double from the present level of around40 Million Tons per year to about 80 Million Tons by the year 2012.
However, the projected expansion of our domestic steel market as well as ourmanufacturing advantages should not lull us into a sense of complacency. Itshould not prevent us from becoming internationally competitive. It is wellknown that the steel industry is periodically subject to price cycles and theonly way to stay consistently profitable is to ensure that the Indian steelindustry is benchmarked with the most globally competitive producers.
The public sector has always had a pride of place in our steel industry. Theseare the "temples of modern India" that Pandit Nehru spoke of. I am happy tonote that the Steel Authority of India Limited has embarked on an ambitiousexpansion plan to meet the country’s projected steel requirements. Iunderstand that SAIL is planning an investment of around Rs. 37,000 crores forenhancing its annual production capacity of hot metal to 22.5 MT by the year2010. The investment of over Rs 9,500 crores here at the IISCO Steel Plant willcreate large new capacities and generate new employment opportunities. It willgreatly help in the industrial regeneration of this potentially vibrant region.
I am aware that IISCO has been going through difficulties in the pastparticularly on account of its obsolete technology, ageing equipment and lack ofsystems modernization. Hence I am glad to note that the present expansionproposal will focus on improving productivity factors like labour productivity,blast furnace productivity and energy consumption for attaining parity withinternational benchmarks. Our public sector producers like SAIL have to functionon the frontiers of technology if they are to stay predominant in an era whereprivate producers are extremely aggressive and competitive. We will do whateveris necessary to make our public sector steel plants globally competitive andretain their pride of place in our industrial firmament. I am sure they willrespond by investing in improving quality, efficiency and cost effectiveness ofexisting plants.
The UPA Government is committed to the modernization and expansion of our publicsector enterprises. We have an effective system for examining the viability ofeach and every loss making public sector unit with a view to identifying itslong term prospects for rehabilitation and growth. There is no blinddisinvestment strategy without examining viability. The government has providedlarge amount of funds for reviving many units such as Bridge & Roof, HeavyEngineering Corporation, Braithwaite & Company, Cement Corporation of India,and Bharat Opthalmic Glass. Units in West Bengal have been a major beneficiaryof our efforts as many units in the state have been put on the revival path. TheIISCO plant is an example whereby we are exploiting its synergies with SAIL andare investing in its future growth. I am confident that many more PSUs willrevive as a result of our efforts. I once again reiterate our commitment to thelong term growth and viability of the public sector.
I am aware that many of you have remained dedicated and committed to IISCOthrough its years of trials and tribulations. I am, therefore, very happy to behere today with all of you and join you now in your moment of joy. The launchingof the modernization and expansion project of this plant gives me immensehappiness. Let this be the dawn of a new era of industrialization of Burnpur andWest Bengal. I wish you all success in your future endeavours.
