‘Demonetisation, GST Once On Track Can Lead Growth In Steel Sector’

India currently being world’s third largest producer of crude steel is expected to become the second largest producer by 2020, said Steel Users Federation Of India (SUFI) in an official statement.

The steel sector in India contributes nearly 2 per cent of the country’s GDP and employs over 600,000 people.

The GDP growth fell to 5.4 per cent per cent in the April-June period - lowest in last three years.

Nikunj Turakhia, President of Steel Users Federation of India (SUFI) said, “The manufacturing sector has dipped from 10.7 per cent to 1.2 per cent year-on- year. It is followed by finance and realty from 9.4 per cent to 6.4 per cent; with electricity, water supply and gas registering 10.3 per cent to 7  per cent.”

There is cause of concern here as this shows significant manufacturing sector slowdown.

One of the reasons is destocking due to introduction of goods and services tax (GST) and leftover effect of demonetisation whereas, the steel sector showed positive growth backed by anti-dumping measures, robust exports, growth in infrastructure and auto sector.

Turakhia believes that the major issue is lack of confidence in the system. The gross fixed capital formation (GFCF) rose only 1.6 per cent year-on- year.

The government needs to work upon stability of policy and confidence building exercise so that manufacturing bounces back strongly. The investment cycle needs to kick start.

The Steel Users Federation of India (SUFI) is an organization which has been formed to pursue the agenda addressing critical issues relating to steel users and contributing the growth of the nation.