The Ministry of Steel has proposed setting up integrated steel hubs similar to the ones in Korea, China and Germany. The hubs would support the growth of the steel sector.
According to a Draft Framework Policy-Development of Steel Clusters in India, “The Ministry is proposing creation of ‘Integrated Steel Hubs’ based on the principle of availability of raw material, logistics support and/or proximity to demand centres. It will enable capacity expansion through provision of a cohesive ecosystem, with presence of effective forward and backward linkages, single-window mechanism for swift approval of clearances and best-in-class logistics infrastructure.” The draft, uploaded on the Steel Ministry’s Website, has sought comments on the proposed policy.
The Ministry of New and Renewable Energy (MNRE) has recently notified amendments to the guidelines for award of solar power projects through tariff based competitive bidding process, relaxing the timeline for land acquisition. This is in line with the commissioning timeline (15 months for projects in solar parks and 18 months for projects outside solar parks) from 12 months earlier.
Lack of momentum in government spending and delay in the execution of infrastructure projects along with continuing sluggishness in the economy are likely to keep cement volume growth under check during the second half of this fiscal. Cement demand across various regions was impacted during the first half of this fiscal. Excessive rains across several States also resulted in dismal cement volumes.
According to trade estimates, the cement industry’s growth was flat during the first six months of the fiscal. The second half doesn’t hold out any hope either.
The coal ministry will auction coal blocks for commercial mining on a revenue sharing basis and proposes to announce incentives for faster production. To incentivise bidders to begin early, the government proposes to offer up to 20% deduction in its revenue share.
This will be the first auction outside the reverse bidding model since the mass cancellation of blocks by the Supreme Court. The revenue sharing model is based on recommendations of an expert committee headed by former Central Vigilance Commissioner Pratyush Sinha that was formed after the fourth and fifth rounds of auctions received a tepid response.
The ministry is soon expected to issue rules for commercial coal block auctions, a government official said.
For the automobile sector reeling from slowdown, there could be some breather from steelmakers lowering contract prices by 11-14% for the second half of FY20. Some have already sealed half-yearly contracts for the auto segment; others are in the process of finishing them.
The National Highways Authority of India (NHAI) is planning to issue land bonds to pay for acquiring land from states or other stakeholders, as part of a funding mechanism amid escalating land acquisition and compensation cost. Through this mechanism, the NHAI will not have to make upfront payments for land acquisition.