(a) Sickness in ferro-alloy sector
It has been reported that most of the old and large ferro-alloy producers are either closed or are reporting to BIFR or are being revived under BIFR, which shows that the industry in certain States has become totally unviable. Maharashtra Electro-smelt Limited (MEL), which is the largest producer of manganese ferro alloys and a SAIL subsidiary, is in bad shape with losses during 1999-2000 amounting to Rs. 16.10 crore from Rs. 11.07 crore of 1998-99. VBC Ferro Alloys, a large producer of ferro chrome and ferro silicon, is under BIFR and a scheme for its rehabilitation was sanctioned by the Board on December 2, 1996.
(b) Increase in sugar production
The production of sugar during current sugar season 1999-2000 is estimated to reach an all time high level of around 180 lakh tonnes making India the largest producer of sugar in the world. As on July 7, 2000, the production of sugar was 178.68 lakh tonnes (provisional) as against 152.38 lakh tonnes (provisional) during the corresponding period of previous season (1998-99) marking an increase of 17.2%. It has therefore been decided to export 10 lakh tonnes of domestically produced sugar.
(c) Project Co-ordination Group to stimulate demand for steel
The Project Co-ordination Group under the chairmanship of Union Minister of Steel, Shri Braja Kishore Tripathy, has felt that there was a need to stimulate the demand for steel in the country. Various issues relating to demand generation, duty matters, EXIM policy and rising cost of inputs were discussed. The meeting was attended by the Heads of All India Financial Institutions, Commercial Banks and senior officials of various Ministries. The representatives of the financial institutions and banks have expressed their willingness to fund last mile steel projects provided entrepreneurs bring in their earmarked equity and are prepared to observe financial discipline. The promoters of these projects have, however, felt that there is a need to reduce import duty on non-coking coal for metallurgical purposes at par with coking coal. It was also felt that current rate of import duty on steel melting scrap and coke should be applicable to the various process routes also.
Steel output up 9.4%
of finished steel in the country has registered a 9.4 per cent increase
in April - August 2000 over the same period last year. During this period,
the country has produced 12.3 million tonnes of finished steel in place
of 11.2 million tonnes during 1999-2000.
Industrial production continued to be sluggish in the current fiscal, with the annual growth rate in June decelerating to 4.9 per cent as compared to 5.5 per cent in May and 5.7 per cent in April. This was largely due to a continued slowdown in the manufacturing sector.
As a result industrial production, based on the index of industrial production, at the end of the first quarter averaged 5.4 per cent, down from 5.7 per cent in the first quarter of 1999-2000. The mining sector grew at 4 per cent, as opposed to a 1.1 per cent fall in April-June in the previous year.
However, the capital goods sector recorded no growth for the three month period. This sector had grown by 10.6 per cent in the corresponding period last year. Growth rate also declined to 4 per cent in case of intermediate goods, from 10.5 per cent in the previous year. Consumer goods, consumer durables and consumer non-durables grew faster compared to the previous year. A decline in the growth rate for manufacturing from 5.8 per cent in June 1999 to 5.1 per cent in June 2000 was mainly responsible for the lacklustre performance of industry. The index had recorded a growth rate of 12.2 per cent in April this year and was scaled down to 5.7 per cent later.
While the official release attributed this fall to the change in the index for wholesale prices, experts are of the opinion that the April figures have been excessively deflated.
While the general index fell to 4.9 per cent in June, 2000 from 5 per cent in June in the previous year, the index for mining grew at 3.8 per cent, up from 1.7 per cent fall in the previous year.