Question

Explain the present position and problems of iron and steel industry in india

Answer 1

Answer:

Some of the major problems faced by Indian iron and steel industry are as follows:

1.Lack of Technology

2.Low Productivity

3.Inefficiency of public sector units

4.Low potential utilisation

5.Heavy demand

6.Shortage of metallurgical coal

7.Inferior quality of products

Hope it helps

Answer 2

Explanation:

Some of the major problems faced by Indian iron and steel industry are as follows:

1. Capital:

Iron and steel industry requires large capital investment which a developing country like India cannot afford.

Many of the public sector integrated steel plants have been established with the help of foreign aid.

2. Lack of Technology:

Throughout the 1960s and upto the oil crisis in mid-1970s, Indian steel industry was characterised by a high degree of technological efficiency. This technology was mainly from abroad. But during the following two decades after the oil crisis, steep hike in energy costs and escalation of costs of other inputs, reduced the margin of profit of the steel plants.

This resulted in lower levels of investment in technological developments. Consequently, the industry lost its technology edge and is now way behind the advanced countries in this regard. Material value productivity in India is still very low.

In Japan and Korea, less than 1.1 tonnes (and in several developed countries 1.05 tonnes) of crude steel is required to produce a tonne of saleable steel. In India, the average is still high at 1.2 tonnes. Improvement in the yield at each stage of production, particularly for value added products will be more important in the coming years.

3. Low Productivity:

The per capita labour productivity in India is at 90-100 tonnes which is one of the lowest in the world. The labour productivity in Japan, Korea and some other major steel producing countries is about 600-700 tonnes per man per year.

At Gallatin Steel a mini mill in the U.S. there are less than 300 employees to produce 1.2 million tonnes of hot rolled coils. A comparable facility in India employs 5,000 workers. Therefore, there is an urgent need to increase the productivity which requires retraining and redevelopment of the labour force.

4. Inefficiency of public sector units:

Most of the public sector units are plagued by inefficiency caused by heavy investment on social overheads, poor labour relations, inefficient management, under­utilisation of capacity, etc. This hinders proper functioning of the steel plants and results in heavy losses.

5. Low potential utilisation:

The potential utilisation in iron and steel is very low. Rarely the potential utilisation exceeds 80 per cent. For example, Durgapur steel plant utilises only 50 per cent of its potential. This is caused by several factors, like strikes, lockouts, scarcity of raw materials, energy crisis, inefficient administration, etc.

6. Heavy demand:

Even at low per capita consumption rate, demand for iron and steel is

increasing with each passing day and large quantities of iron and steel are to be imported for meeting the demands. Production has to be increased to save precious foreign exchange.

7. Shortage of metallurgical coal:

Although India has huge deposits of high grade iron ore, her coal reserves, especially high grade cooking coal for smelting iron are limited. Many steel plants are forced to import metallurgical coal. For example, steel plant at Vishakhapatnam has to import coal from Australia. Serious thought is now being given to replace imported coal by natural gas from Krishna-Godavari basin.

8. Inferior quality of products:

Lack of modern technological and capital inputs and weak infrastructural facilities leads to a process of steel making which is more time consuming, expensive and yields inferior variety of goods. Such a situation forces us to import better quality steel from abroad. Thus there is urgent need to improve the situation and take the country out of desperate position.