With an aim to revive investment in the steel sector, the Ministry of Steel has proposed to set up special purpose vehicles (SPVs) in the mineral-rich states such as Karnataka, Chhattisgarh, Odisha and Jharkhand. Secretary of Ministry of Steel G Mohan Kumar has asserted that role of the SPVs will be to acquire land and obtain all necessary environment and forest clearances. By adding further he said that after completing all preparatory work for setting up new steel plants through SPV, the Ministry can invite steel makers and hand over the project to them in a transparent manner.
The move to create SPVs comes as greenfield capacity for steel manufacturing is not picking up. Greenfield projects of world’s largest steel maker ArcelorMittal and South Korean steel maker Posco have not taken off even after 10 years since the companies had set plans to build steel plants in India. However, in spite of these efforts, Steel Ministry expects a slow offtake in greenfield projects in future and stated that brownfield expansion will be the major area of growth in steel manufacturing capacity addition in the next 8-10 years.
Further, Steel Ministry also proposed to set up Special Mining Zones, where regions with mineral resources will be identified as strategic resources. There will be only one nodal authority which will arrange necessary green clearances for mining projects in such areas.
India is the fourth largest steel maker in the world with 81 million tonnes of production in FY14. The performance of steel industry is highly correlated to overall economic growth as steel demand is derived from construction and automobile sectors. The steel industry contributes about 2 percent of the country's GDP and employs over six lakh people