Iron and Steel : Strengthening India - SRMAsrma.co.in/pdf/SRMA-Steel-newsletter-11th-Issue.pdfPage 2...

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Page 1 of 20 11 th Issue Steel Re Rolling Mills Association of India visit www.srma.co.in SRMA STEEL NEWS SRMA Steel Re Rolling Mills Association of India www.sram.co.in Steel Re-Rolling Mills Association of India www.srma.co.in Sl. No, Name 1. Shri B.M. Beriwala, Chairman 2. Shri Jagmel Singh Matharoo, Vice Chairman 3. Shri Ramesh Kumar Jain, Treasurer 4. Shri Sanjay Jain 5. Shri Kailasj Goel 6. Shri G P Agarwal 7. Shri S K Sharda 8. Shri Sandip Kumar Agarwal 9. Shri S. S. Sanganeria 10. Shri Sanjay Surekha 11. Shri R P Agarwal 12. Shri S. S. Bagaria 13. Shri Girish Agarwal 14. Shri Goutam Khanna 15. Shri Suresh Bansal 16. Shri Rajiv Jajodia 17. Shri Bhusan Agarwal 18. Shri Mahesh Agarwal 19. Shri Sita Ram Gupta 20. Shri Ashok Bardeja

Transcript of Iron and Steel : Strengthening India - SRMAsrma.co.in/pdf/SRMA-Steel-newsletter-11th-Issue.pdfPage 2...

Page 1: Iron and Steel : Strengthening India - SRMAsrma.co.in/pdf/SRMA-Steel-newsletter-11th-Issue.pdfPage 2 of 20 11th Issue Steel Re Rolling Mills Association of India visit Steel Re Rolling

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SRMA STEEL NEWS

SRMA

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Association of India www.sram.co.in

Steel Re-Rolling Mills Association of India www.srma.co.in

Sl. No, Name

1. Shri B.M. Beriwala,

Chairman

2. Shri Jagmel Singh Matharoo,

Vice Chairman

3. Shri Ramesh Kumar Jain,

Treasurer

4. Shri Sanjay Jain

5. Shri Kailasj Goel

6. Shri G P Agarwal

7. Shri S K Sharda

8. Shri Sandip Kumar Agarwal

9. Shri S. S. Sanganeria

10. Shri Sanjay Surekha

11. Shri R P Agarwal

12. Shri S. S. Bagaria

13. Shri Girish Agarwal

14. Shri Goutam Khanna

15. Shri Suresh Bansal

16. Shri Rajiv Jajodia

17. Shri Bhusan Agarwal

18. Shri Mahesh Agarwal

19. Shri Sita Ram Gupta

20. Shri Ashok Bardeja

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SRMA STEEL NEWS

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Executive Summary

Concept Of Direct Rolling In Steel Re-Rolling

Policy taken by Ministry of Steel to increase the demand of Steel

Environment and Safety

Labour & Legal News

Taxation News

Government launches Rs. 500 Crore India Inclusive Innovation Fund to

connect the financial gap of MSME sector

Event & Latest Steel News

CONTENTS

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Demand continued to remain silent during April-June 2013; exports obtain momentum on the back of increased

production by main steel producers: Sluggishness in key end-user industries continued during the period April-June

2013, leading to the domestic steel consumption growing 0.2% over the corresponding period of the previous fiscal

year. India's steel demand are expected to go up by 3 to 5% in the next financial year on higher economic growth

although margin pressure would continue due to high production costs and limited scope to pass them on to

customers. Better GDP growth of 5.6% in FY'15 on the back of a revival in industry growth would lead to better

steel demand growth next fiscal. It would be in the range of 3 to 5% but not above 5%. No major hike in prices

next fiscal due to overcapacity in the domestic steel industry which will continue to limit prices amid the demand

increase.

India’s current installed steel capacity is around 95 million tonne and 13-15 million tonne is expected to be added

within FY 2015. It may be noted that margins of steel producers would continue to be under pressure, given the

high cost of production and their limited ability to pass on hikes in costs. The availability of iron ore should

improve, limiting hike in costs. Coking coal prices will also range between USD 160 to 175 a tonne. Steel imports

have slid into a negative territory in the period April-June 2013 (-34.1%), continuing with the trend witnessed in the

second half of the previous year. Overall growth in steel imports in FY13 stood at 14.6%, sharply down from a

growth rate of around 38% posted in the first five months of FY13, implying a moderation during the second half

due to a reduced differential between domestic and imported steel prices.

According to World Steel Association, the leading global industry body, the rate of growth in demand for the last

calendar year was just 2.5 per cent. The 3.3 per cent growth in consumption was the slowest in last three years,

according to figures revealed by Joint Plant Committee, a body under the Steel Ministry. It grew by 5.5 per cent in

2011-12 and 9.9 per cent in 2010-11. World Steel Association, the leading industry body, has forecast that India's

steel demand will grow by 5.9 per cent to 75.8 million tonnes in 2013. "In India, steel demand is expected to pick up

and will grow by 5.9 percent to 75.8 million tonnes in 2013 following 2.5 percent growth in 2012 as monetary

easing is expected to support investment activities,".

The Indian Economy is sandwiched between global economic woes and laggard policy framework in the country.

From an average 8-9 per cent in the recent past, domestic GDP growth has slipped to 5-6 in the past couple of

years. Accordingly, with the slow-down across steel end-use industries, especially industrial and infrastructure

construction, steel demand growth has plunged from around 9 per cent for the last 10 years to a mere 4-5 per cent

for the last couple of years. With further weakness in the GDP outlook at 4.8 per cent, steel demand is expected to

post an even lower growth rate of 2-4 per cent in 2013-14. The slide in demand is largely contributed by execution

delays in construction projects and lower demand for automobiles and consumer durables.

The decline in import also represents a weak demand and a higher base effect. On the other hand, steel exports have

risen by 12.7% % in the period April-June 2013. This was largely necessitated by an inventory build-up by major

steel producers, who reported a higher production growth relative to the growth in demand. A depreciating rupee

and export incentives have also aided steel exports, despite the declining trend in international steel prices in the

above period. With a capacity of about 15 million tonnes (mt), which is equal to almost 16% of the current domestic

capacity, being estimated to come up in FY14 as per the Working Group of Ministry of Steel.

Global growth projections are inspiring now as the World Bank is projecting encouraging growth of the global

economy. The Global GDP growth is expected to increase from 2.4% in 2013 to 3.2% in 2014, stabilizing at 3.4%

in 2015 and 3.5% in 2016. For high income countries the economic growth is expected to increase from 1.3% in

2013 to 2.2% in 2014, stabilizing at 2.4% for 20 15 and 2016. Growth in developing economies is expected to rise

above 5% in 2014 while India is expected to grow at 6.2% during 2014-15. Recently, our Hon’ble Prime Minister

has also said that the economy will end this year (2013-14) at the same level as last year with 5% growth.

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The Induction Furnaces melt Scrap and Sponge Iron and produce Ingot through

Ingot Molding and some have the continuous Billet Casters also. The cast Ingots or

Billets are cooled and sent for rolling in the Rolling Mill. The cooled ingots or

Billets are then reheated by placing them into Billet Reheating Furnace which

operates on fossil fuel like: “furnace oil or coal”; after the Billet or Ingot is heated

up to 1200 degree Celsius, then these are discharged and taken for rolling. This

process consumes a lot of fuel in reheating furnace and causes burning loss of

around 1.5 -3.5% depending on the type of fuel used. heating of billet/ingot is not

very uniform. The production in Rolling Mill also gets affected many times due to

limitation of the manpower handling and Billet Reheating system because in top fired pusher furnace, heating is only from the

top surface of the material. However, the re-rolling sector has been operating quite well under the above limitations. It is also

important to note that burning of fossil fuel causes generation of CO2 and a large quantity of the same is exhausted through

Chimney in addition to other pollutants causing several environmental problems and Global Warming. It is well known that

Technology Development is a dynamic phenomena and in this case the constant search by Indian Entrepreneur has given birth to

a Revolutionary Technology of Direct Rolling in a SRRM sector. Although, the Technology is in practice in a few steel mills

abroad but they are the most modern mega steel plants. In a SME sector, this is indeed a great achievement in the world.

ADVANTAGES OF DIRECT ROLLING PRACTICES

Depending upon the facilities such as capacity, number of induction furnace (IF), mill equipment etc., it would be

possible to achieve 75-80% direct rolling. Thus, huge saving of furnace oil and coal required for heating of the

billet/ingot which will result into enormous saving in Fuel energy and thereby reduce the Green House Gas (GHG)

emission.

Reduction in the scale loss to the extent of 1.5 to 3.5%, which would have been burned in the billet reheating furnace.

Savings due to avoidance of runners risers etc., improving the yield about 4-5%.

Savings in the cost of Ingot moulds, refractory, etc.

It will improve the productivity of the mill and also that of the manpower engaged in the Plant.

It would also result in some saving in power consumption because of the indirect savings of Burning loss and improved

liquid metal to finished steel etc.

It will also help in reducing the manpower required in any unit and also reduce the risks of lower production caused

due to the manpower engaged in vital function of mould settings; ingots finishing and loading in the billet reheating

furnace etc.

It will reduce miss roll, cobbles, etc and improve the product quality, increase % yield etc.

FACILITIES

In order to achieve smooth operation, the following facilities are required to be installed in the CCM section of any Induction

Furnace and rolling mill complex:

A suitable radius of Concast machine (CCM) with preferably double strand facility. However the single strand can also

be set up or three or more strands can also be set up. But the present sizes available in SME units, it is proposed to

use single strand with a backup availability of second strand for being put into use as per the requirement.

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A suitable radius mould tube having indirect cooling through DM water

followed with a secondary cooling facility having direct spray cooling through

controlled spray of water, controlled by programmable logic controller. By

varying the flow rate of spray water during the secondary cooling. It is also

desired to have a control on the flow of cooling water for the Mould Tube

Cooling too; so that the controlled cooling can be achieved.

A suitable radius at secondary portion of the CCM is provided up to the

withdrawal and withdrawal is provided also with variable speed control through VFD (AFC).

Subsequent to that in each strand one hot billet shearing machine should preferably be installed to ensure that billet

being cast are cut to the desire length by consuming minimum time and in line with the casting speed without causing

any loss of metal and also without creating any distortion in the end of the billet so that, the ends of the billet do not

cause any adverse impact at the entry of first pass. Although at many locations people prefer to install only the manual

gas torch cutting facility by using acetylene and oxygen or the LPG with Oxygen. But this has several disadvantages

over the on line Hot Shearing Machine.

Once the Hot cast Billets are cut to size by the Billet Shearing Machine then the conveying speed of the cut billet is

enhanced to ensure fastest travel of Hot cut piece of the billet to the first pass. The layout may requires that the cut

billets to be rolled are shifted at 90 degree angle or may also be possible to convey it straight to reach the rolling mill

conveyor. This will depend on the Mill Layout with respect to the Induction Furnace layout.

Rolling Mill conveyors may be required to be designed to provide a linear speed of 1.5 mt/sec or even little more to

convey the hot cut billets as fast as possible. The conveyors will be driven by VFD. In case the distance of conveying is

more then it may require that the conveying mechanism is so designed that the heat loss during travel is minimum. This

may require to even provide certain enclosures canopy linked with refractory material and covers over the conveyors.

The temperature profile from the induction furnace up to the first pass of rolling mill stand should be maintained in the

following levels:

Tapping Temperature at Induction furnace should be maintained between 1660 to 1670 Degree C depending on the

number of factors.

The ladle designed should be so provided to minimize the loss of heat during transporting the liquid metal up to

CONCAST stand. It is expected that not more than around 3 to 4 minutes should take to transport the ladle.

Temperature drop during pouring will be 40 Deg. C and during transport shifting of ladle to Concast stand will be 10 to

12 Deg. C. Thus enough heat will be available even with the liquid metal during the casting from ladle.

Subsequently during nitrogen purging another 5 deg. C drop will take place.

Accordingly the opening temperature of liquid metal while start of pouring in the mould will be about 1590 Deg C. and

is likely to remain above 1550 Deg by the time the pouring/casting is completed.

The solidification of the liquid metal in the mould will take place due to the indirect primary cooling and thereafter

controlled spray of direct cooling water during the secondary cooling. The PLC controlled water spray system will help

to ensure that the billet is completely solidified at the withdrawal point and also be having a skin temperature of above

1050 to 1100 Deg. C.

The billet shearing machine should be placed at the closest possible point to so as to avoid any more heat loss during

further conveying.

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All this protection and minimum time to convey the billet from shearing machine

to the first pass should ensure that the maximum temperature drop is not likely to

be more than 5 to 10 Degree C.

The insulated cover will also help in protecting the scale losses.

The CCM is likely to operate 24 hours whereas rolling mill will requires at-least 2

hours of maintenance time. Therefore for accommodating the material casted

during this rolling mill shutdown period; the cast billet should be conveyed to the cooling bed for which a sufficient

length cooling bed should be provided.

It is important to take into consideration the present melting facilities and re rolling facilities capacity.

PRECAUTIONS

Once the rolling process is integrated on line with that of Hot cast billet rolling then the entire process must be very

well synchronized and it will require very care full and perfect planning in each every aspects of operation from

beginning till the end such as:

Proper Selection of raw material for Induction Furnace (IF).

Complete analysis of the charge and proper material balancing before melting itself to target the proper levels of

carbon, phosphorus and sulfur to be achieved.

Scheduled predictive/preventive maintenance in time for all the facilities

Proper selection of the Acidic/Neutral Ramming mass and proper application of the same. Timely relining of the

crucible well in advance and after every defined number of heats.

Proper and adequate arrangements for proper ramming mass

Controlling the melting temperature and time to achieve the scheduled sequence.

Maintenance of the desired temperature profile as planned

Maintenance of the passes and the mill area equipments in perfect operating conditions.

Adequate stocks of the spares and emergency backup facility along with the emergency backup power. Proper training

to the manpower from testing, Operation, maintenance to quality and inventory control.

Reduce the dependence on any manual handling even in the re rolling mill. Hence the Re Rolling mill feeding and

discharge of the rolling objects must be automated.

Cooling bed must also be made automatic.

It is to be realized that after the Induction furnaces are synchronized with the re rolling mill through the caster then the

success of the plant depends on the failure free and maintenance free operations. Thus all the equipments and machines

and spares must be carefully procured from very good and reputed makes and manufacturers.

It is also very important that the design and operations of the plant is given in hand of experienced and expert persons

only.

Source : AIIFA

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Vision, Objectives and Functions

=> Vision > The ministry’s vision for the industry is to transform India

into a global leader in the steel sector, both as a steel producer as well as a

steel consuming nation and to enhance the industry’s international

competitiveness.

=> Mission > 1) Promoting policies, initiatives and incentives for attaining

a national steel production capacity exceeding 100 million tonnes per annum by the year 2015-16.

2) Streamlining the regulatory environment for enabling optimal steel production; particularly regarding mineral

policy and the mine allocation regime, tariff and taxation measures, land allocation and environmental and forest

clearances.

3) Promoting the development of infrastructure required for enhancing national steel production through

coordinated efforts, particularly in sectors like Railways, Roads, Ports, Power and Water supply.

4) Enhancing domestic demand for steel through promotional efforts and by enlarging the retail network of steel

companies.

5) Improving the techno-economic efficiency of operations of steel ministry’s PSUs.

=> Objectives > 1) 1(a) To facilitate the early realisation of steel investment proposals both in the public and

private sector through coordination and consensus building with state governments and agencies of the union

government particularly through the forum of the Inter Ministerial Group (I.M.G.); for attaining the national

objective of total finished steel production exceeding 100 million tonnes by 2015-16. 1(b) To facilitate creation of

appurtenant infrastructure required for steel capacity addition and to pursue clearance required by the public and

private sectors in areas like mineral allocation, land allocation and environmental & forest clearances.

2) To oversee the completion of the capex and modernisation programmes of the PSUs particularly SAIL, RINL

and NMDC.

3) Ensuring adequate availability of raw materials for steel industry from domestic and overseas sources,

particularly iron ore and coal by PSUs under the steel ministry.

4) To facilitate and monitor mergers, acquisitions and Joint Ventures by the steel ministry PSUs.

5) To pursue with the Ministry of Finance and the Ministry of Commerce for the adoption of fiscal and tariff

measures for ensuring the sustainability and future prospects of the Indian steel industry.

6) Promotion of Steel usage through cost effective steel products, dissemination of knowledge and ensuring higher

steel availability in rural areas

7) Promotion of Research and Development in steel sector.

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8) To improve the commercial and technical efficiency of operations of all

PSUs.

9) To encourage implementation of Quality control standards in manufacture of

steel and steel based products

Current performance

Indian steel demand is today driven mostly by domestic requirements and since

2006-07 India has been a net importer of steel. The various economic and fiscal

measures initiated by the government combined with a robust economic and

financial market trends has resulted in sustained demand from major consumers

like construction, real estate, housing sectors and industries requiring

specialised steel applications like auto and electrical components sectors.

During 2009-10, the total net production of finished steel was 59.69 millon tonnes as against 57.16 millon tonnes in

2008-09 i.e. a growth of 4.4 per cent. The total net consumption of finished steel during the year was 56.47 millon

tonnes as against 52.32 millon tonnes in 2008-09 i.e. the rise of 7.7 per cent. As for external trade during the year,

imports of finished steel increased by 24.8 percent to touch 7.29 million tonnes from 5.84 millon tonnes in 2008-09

but exports showed a decline of 28.8 percent i.e. 3.23 millon tonnes from 4.44 million tonnes in 2008-09

External factors affecting the sector

Political - Steel usage ranges from the ordinary i.e. household items /tools etc. to the massive and complex ones i.e.

bridges, communication towers, machinery, railways and defence equipments etc. It is an industry charachterised by

large scale investments in land, equipment and technology, long gestation periods but at the same time also

relatively huge margins /profits on account of the value, durability and varied usage of the final product cutting

across sectors. Despite this they are also heavily dependent on political intervention and consensus building to

access the basic raw material and infrastructure support linkages necessary for day to day operations. Other policies

decided at a political level like that of resettlement and rehabilitation of population in and around the plants / mines

set up as well as on environmental sustainability etc. are also of crucial relevance to the industry.

Economic - Despite many inherent advantages like availability of quality iron ore, low wages and availability of

highly skilled personnel etc. Indian steel industry continues to be restricted by its low labour productivity, high

energy consumption levels, heavy dependence on imported technology including for maintenance operations etc.

Steel manufacturing across the world has become a very competitive business and in such an environment the only

way to move ahead of one’s rivals would be by achieving operational efficiency through adoption of cost cutting

options, diversification, right product mix, increased investment in innovation centric research and development

effort and personal training

Technological - Steel making is a highly capital and technology intensive sector. Therefore sustained and consistent

improvements in parameters of technical efficiency has become vital specially in areas where the industry is

lagging behind. Such problems are mainly related to obsolescence of technology adopted and lack of timely

modernisation / renovation, quality of raw material and other inputs, inefficient shop floor practices, lack of

automation and R&D intervention

Environmental - Environment protection in iron ore & steel plants is essentially linked to the technology adopted

for iron & steel making starting from raw material to finished steel stage and finally to the efficient disposal/re-use

of generated bye-products and waste. Therefore, effective management of environment calls for an integrated

approach covering the production process as also the environment surrounding the plant.

Legal - A number existing legal / statutory regulations and government policy guidelines are of crucial relevance to

the industry. Some of the crucial ones amongst these include those linked to allocation of mining leases,

environmental and forest clearances, quality control and the Policy on resettlement and rehabilitation etc.

Source : Ministry of Steel

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To provide greater focus on Research and Development (R&D) for developing

indigenous technologies specially for finding solutions for optimum

utilization of indigenous resources and mitigating the concerns

ndigenous resources and mitigating the concerns of environment and climate

change.

To encourage production and consumption of value added steel by providing

necessary focus on availability

and product development especially for (a) meeting the special requirement of

rural India, b) meeting the special requirement of auto , power.

construction and shipping sectors c) producing lighter but stronger steels which

help in achieving higher energy efficiency in end applications and also help in mitigating the concerns on

environment, climate change and human health.

To ensure sustainable development of the industry with minimum possible displacement of local people and

loos of their livelihoods and minimum damage to the environment by adopting best practices in the production

processes and ensuring adoption of people and environment friendly practices by the investors.

Promotion of steel consumption is to be undertaken primarily by the steel producers. However,

government will encourage steel consumption, supporting R&D projects such as for product design and generic

campaign in specific areas which help in addressing concerns related to environment, climate, human health,

housing for the masses and higher rural penetration for inclusive, growth. Advantages of steel use in terms of

sustainability, durability, amenable design and life cycle costing compared to alternate materials like plastics and

wood will be made more visible and adequately propagated through sustained programmes of awareness. Some of

the application areas which may qulify for the special treatment are as follows :

a) In specific applications where steel can substitute a competing product on the promise of greater environmental

safeguads.

b) Promotion of stainless steel in infrastructure such as bridges, ports etc. in the coastal areas which are prone to

severe and extreme corrosion.

c) Promotion of stainless steel in railway coaches for longer life and passenger sagety.

d) Application of high strength steel and support to R&D for their use in automotive and appliance industries.

e) Promotion of application research involving tubular frames and other pre-fabricated products for use in

energy efficient high rise structures aimed at bringing in affordable housing to accommodate India’s growing

urban population.

f)The government will encourage use of steel in areas where it has the potential to mitigate the risks associated with

natural calamities such as earthquakes

g) In promoting and providing safe packaging, in particular for food products, to replace competing toxic packaging

materials and discouraging use of seconds and defective steel materials.

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By 2025, it is estimated that 70 per cent of Indians will be of working age.

This ‘demographic dividend’ could give India an edge over the developed

countries where a larger segment of the population would by then be past

retirement. However, this demographic dividend can easily turn into a

demographic disaster if a majority of the working age population remains

unemployable due to a lack of skills. Even today, one hears of a shortage of

skilled workers across industries, which does not augur well for sustaining

India’s economic growth. For instance, the construction industry lacks

sufficient plumbers and construction machine operators, resulting in a slowing

of construction activity and increasing the overall cost of projects, posing a

major challenge to India’s infrastructure development plans (Heikkila 2012).

In the light of this situation, skill development has gained an impetus in India’s policy-making circles headquartered

in New Delhi. The central government’s concern with this shortage of skilled workers is best described in the words

of the Indian Prime Minister, Manmohan Singh, ‘As our economy booms and as our industry grows, I hear a

pressing complaint about an imminent shortage of skilled employees. As a country endowed with huge human

resources, we cannot let this be a constraint’ (Government of India 2011a). Towards this end, the government of

India has set for itself a task of creating a skilled workforce of 500 million by 2022. A National Skill Development

Council has been created under the Prime Minister’s auspices. Of the 500 million, over two-thirds of the target has

to be met by existing vocational training initiatives offered by 17 central government ministries. For the remaining

one-third, a private-public partnership based National Skill Development Corporation (NSDC) has been set up.

Given the policy focus and ambitious targets for scaling up vocational training and skill development efforts, it is

important to first explain why a shortage of labour still exists despite ongoing initiatives to improve training.

This paper highlights that vocational training offered in India is mismatched with the needs of casual workers who constitute

over 90 per cent of the labour force, resulting in a shortage of skilled workers at the national level. Casual workers, such as

construction workers, often comprise migrant workers from rural areas with poor education, no formal training and who are in

‘dire’ need of occupational up-scaling.

First, there are high barriers to entry under the current vocational training set-up. For example, the existing structure requires

secondary education (class VIII) as a prerequisite for enrolling into vocational training schemes. This restricts a significant

proportion of illiterate or less educated workers from even entering into the formal training system. In contrast, the Chinese

vocational education and training (VET) system, which is similar to India’s, targets a larger population as the average education

level of its working age population is higher.2 The Chinese government also has specific initiatives at the local government

level to train unskilled and uneducated migrant labour for sectors like construction, while such initiatives are missing in India.

Second, the federal structure of the Indian government results in a lack of coordinated action between national and state

governments, which shows in mismatched prioritisation at the policy-making and implementation levels. For

instance, the central government’s findings estimate that the construction sector will create over six times more jobs than the

Information Technology (IT) and related services sectors by 2022 (FICCI 2010:11). However, the state growth plan for two

major states, Uttar Pradesh (UP) and Maharashtra, which drive construction growth, shows state government initiatives for the

IT sector and none for construction. This mismatch between India’s policies at the national level and ‘on-the-ground’

implementation by the states nullifies the policy focus in the informal sector, further compounding the perpetual shortage of

skilled workers.

The paper is divided into three main sections. The first section details the current structure of India’s existing vocational training

system, government focus and recent policy decisions. This is followed by a literature review of some common arguments made

to explain India’s skills deficit and concludes why none of these address the lack of training for casual workers. The second

section examines construction-specific vocational training initiatives across two Indian states, UP and Maharashtra, to illustrate

the lack of avenues for training for casual workers in India. The construction sector employs 83 per cent casual workers and

hence, is similar to the Indian workforce demographic. It also represents a large majority of the workforce. Source : Ministry of Labour

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Legal News

Companies law set to mandate 2% CSR spend

NEW DELHI: India Inc should brace to set aside a specified

portion of its profit on corporate social responsibility (CSR). The

ministry of company affairs (MCA), which is finalizing the new

Companies Bill, has accepted a Parliamentary Standing

Committee’s recommendation on the issue. The standing

committee on finance headed by former finance minister Yashwant

Sinha has proposed that companies with a turnover of Rs 1,000

crore or net profit of Rs 5 crore or more earmark 2% of their net profit for the preceding three years on CSR.

Though corporates and industry chambers had lobbied hard against the move, the government has decided to go

ahead with the proposal. It is, however, unclear what really constitutes spending on CSR. The standing committee

had said that companies would decide the policy and the spending. While mandating CSR spend, the government

had decided against policing and will leave it to companies to implement what is being prescribed in the law. In case

a company fails to meet the prescribed spend, it will have to spell out the reasons for the shortfall to its shareholders.

The CSR spending proposed to be mandated in the new Companies Act would be in addition to what is being

prescribed for companies in the mining or the coal sector. For instance, in case of Posco, the environment ministry

has asked the Korean company to spend 2% of its annual profit on CSR.

The coal ministry is also toying with the idea of mandating a CSR levy on miners who dig for the mineral in the so-

called No-Go areas that are environmentally sensitive.

The proposal for mandating a CSR spend was first discussed by the corporate affairs ministry

around two years ago but it had to be turned into a voluntary exercise in the wake of protests

from companies. But armed with a recommendation from parliamentarians, the ministry is now

set to implement its plan.

The revised Companies Bill will be placed in Parliament during the Budget session that starts later this month. The

bill has been sent to law ministry for vetting, corporate affairs minister Murli Deora said. Corporate India has,

however, got one last chance to present its case when the ministry meets industry representatives next week.

(Times of India)

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TAXATION NEWS

Service Tax No TDS on Service Tax if shown separately Pursuant to an important judgement of the Hon’ble Rajasthan High Court, in the case of Commissioner of Income Tax (TDS),

Jaipur Vs. M/s. Rajasthan Urban Infrastructure [2013 (8) TMI 12 – RAJASTHAN HIGH

COURT] holding that if as per the terms of the agreement between the payer and the pay ee, the amount of service tax is to be

paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on

the service tax component u/s 194J of the Income Tax Act, 1961 ( “the Act” ).

Earlier, vide Circular No. 4/2008 dated 28-04-2008 it was clarified that tax is to be de ducted at source under Section 194-I of

the Act, on the amount of rent paid/payable without including the service tax component. Representations/letters has been filed

to CBDT seeking clarification whether such principle can be extended to other provisions of the Act also

CBDT has examined the matter afresh and clarified vide Circular No. 1/2014 dated 13-1-2014 -“TDS under Chapter XVII-B of

the Income-tax Act, 1961 on service tax component comprised of payments made to residents” that wherever in terms of the

agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is

indicated separately, tax shall be deduct ed at source under Chapter XVII-B of the Act on the amount paid/ payable without

including such service tax component

CENTRAL EXCISE NOTIFICATION No. 02/2014-CX., (N.T.), Dated 20

th January, 2014

[F.No.332/09/2013-TRU] In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994) , the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:- 1. (1) These rules may be called the CENVAT Credit (Second Amendment) Rules, 2014. (2) They shall come into force on the date of their publication in the Official Gazette 2. In rule 12 of the CENVAT Credit Rules, 2004, after the brackets, letters, figure s and words, “[GSR 307(E), dated the 25

th April, 2007]” the words, figures, letters and brackets, “or No.1/2010-Central Excise, dated the 6th February,

2010 [G.S.R. 62(E), dated the 6th February, 2010]” shall be inserted.

Sd/-

(Raj Kumar Digvijay) Under Secretary to the Government of India

CUSTOMS NOTIFICATION No. 07/2014-Customs (N.T), Dated 28

tth January, 2014

[F.No.554/02/2007-LC]

G.S.R. 66(E).-In exercise of the powers conferred by section 11 of the Customs Act, 1962 (52 of 1962) the Central

Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following

amendments in the notification of the Government of India in the Ministry of Finance, Department of Revenue,

No.152/84-Customs, dated the 15th

May, 1984, published in the Gazette of India, Extraordinary Part II, Section 3,

Sub-Section (i), vide number G.S.R.379(E) dated the 15th

May, 1984 namely:-

In the said notification, the following proviso shall be inserted, namely:-

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“Provided that the prohibition shall not apply to import of machinery and equipment, which were exported to

Bhutan from countries other than India through an Indian place of entry, for use in execution of projects in Bhutan,

subject to the conditions that- i. The importer produces before the Assistant Commissioner of Customs or Deputy Commissioner of Customs the

‘Letter of Guarantee’ or the ‘Bill of Import’ and the other documents based on which the said goods were

originally allowed transit clearance from the Indian place of entry to Bhutan, and

ii. The Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied regarding the identity

of the goods

Sd/- (M. Satish Kumar Reddy)

Director (ICD

Withholding tax on installation charges: Deloitte

Recently, the Pune tribunal has held that installation/erection and related service charges formed an integral part of

the purchase price of machinery and the situation would remain unaffected, whether the charges were embedded in

the cost of purchase price or, were charged separately. Thus, there was no obligation on the payer to withhold tax on

entire payment.

The case was like this. During 2007-08, Mahindra Forgings Ltd (tax payer), which makes forgings for the automotive

industry, bought forge and similar machines from various parties outside India for setting up a forging industry in

Pune.

The assessing officer (AO) held that these payments (other than payments for purchase of machinery) were taxable as

fees for technical services (FTS) under the Income-tax Act, 1961 (ITA) and also under Article 12 of the India’s tax

treaties with the respective countries, and considered the tax payer as an ‘assessee-in-default’ for not deducting tax at

source.

On appeals by the tax payer, the commissioner of income-tax (appeals) [CIT(A)] confirmed the AO’s view in respect of

payments made to Russian, German and Czech Republic companies on the basis that there were separate agreements

(i.e. purchase orders) for purchase of machinery and separate for installation/ erection and related service charges.

However, CIT (A) did not agree with the position taken by the AO in respect of payment made to A Japanese company

(to which no separate PO was issued) for supply of designs and drawings on the basis that the transaction was a

purchase transaction as no technology know-how relating to the machinery was made available.

The tax payer and the AO filed appeals before the Pune tribunal. The key issue before the tribunal was, whether the

tax payer was required to withhold tax on payment towards installation/erection and related service charges and on

supply of designs and drawings. The tribunal held that:

The supervision of installation /erection of machinery was an activity which related to sale of machinery and the

installation charges formed an integral part

http://www.financialexpress.com/news/withholding-tax-on-installation-charges-deloitte/1236325

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Government launches Rs. 500 crore India Inclusive Innovation Fund to connect the

financial gap of MSME sector

The National Innovation Council (NInC) and the Ministry of Micro, Small and Medium Enterprises (MSME) has

jointly announced the creation of the India Inclusive Innovation Fund (IIIF). The India Inclusive Innovation Fund

has been approved by the Union Cabinet with a view to combine innovation and the dynamism of enterprise to solve

the problems of citizens at the base of the economic pyramid in India.

The fund will be registered under SEBI’s Alternative Investment Fund Category I guidelines with an initial corpus

of Rs. 500 crores , with the Ministry of MSME committing to 20% (Rs 100 crores) and the balance will be given by

banks, insurance companies, overseas financial and development institutions. The fund will endeavour to provide

modest financial returns ensuring significant social impact to the community.

Te fund’s eventual aim is to expand the corpus to Rs. 5,000 crores over the next 24 months. The IIIF seeks to

create a new class of capital which helps in setting up and upgrading entrepreneurial skills and innovation which is

the need of the economy. The fund will invest in innovative, scalable and sustainable ventures and address social

needs of less privileged citizens in areas such as healthcare, food, nutrition, agriculture, education / skill

development, energy, financial inclusion, water, sanitation, employment generation, etc.

The Fund will invest in innovative ventures that are scalable, sustainable and therefore profitable but address social

needs of less privileged citizens in areas such as healthcare, food, nutrition, agriculture, education and many others.

“The needs of the people at the base of the economic pyramid are today served by philanthropy and government

grants or subsidies which can never be either adequate or scalable. IIIF seeks to leverage the model of Venture

Capital funds to transform the lives of the less privileged,” said Sam Pitroda, Chairman of NinC and Advisor to the

Prime Minister on Public Information, Infrastructure and Innovation.

IIIF seeks to address the existing capital gap and therefore initially, at least 50% of its investments will be to

enterprises that fall in the MSME stage. The IIIF will also partner the entire ecosystem in this space, including

incubators, angel groups, and also public R&D programmes and laboratories to support the commercialization and

deployment of socially relevant innovative technologies and solutions.

The day to day operations of the fund will be entrusted to an Asset Management Company (AMC) which will be set

up as a Section 25 not for profit company. The underline philosophy of the programme is to bring various

stakeholders together not only for financing the enterprises but also providing handholding support in different

manner through technical inputs to connect with the markets. A number of initiatives will be brought on board and

will have a bearing in future on this programme.

The IIIF will also partner with the entire ecosystem, including incubators, angel groups and public R&D programs

and laboratories to support the commercialization and deployment of socially relevant innovative technologies and

solutions. Lack of capital is one of the major reasons why ventures and entrepreneurs seeking to address the needs

at the base of the economic pyramid have failed to take off, the release stated. IIIF seeks to address this gap and

therefore at least 50 percent of its investments initially will be towards enterprises that fall in the MSME category.

IIIF, which has been approved by the Union Cabinet, was conceived by the NInC as a concept which seeks to combine

innovation and the dynamism of enterprise to solve the problems of citizens at the base of the economic pyramid in India. The

Government will not be involved in the day to day operations of the Fund, which will be entrusted to an Asset Management

Company (AMC), set up as a Section 25 not for profit company. The AMC will appoint a professional management team for this

purpose as also an Investment Committee comprising professionals of repute, which will take all investment and divestment

decisions. The AMC will also build a mentoring network, enable incubation and provide training and skills development programs to entrepreneurs and IIIF assisted companies.

Source : http://entrepreneurindia.in/thebuzz/specialreport/government-to-launch-rs-500-crore-india-inclusive-innovation-fund/23595/

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Minerals, Metals, Metallurgy & Materials (MMMM) 2014

4-7, September 2014

Pragati Maidan

New Delhi

For Booking & Enquiries

International Trade and Exhibitions India Pvt. Ltd.

1106-1107, Kailash Building, 26 K.G. Marg, New Delhi- 110001, India

Tel: +91 11 40828282

Gagan Sahni: +919810036183

Varun Sharma:+91 11 40828208

Smita Roy: +91 11 40828217

Sandeep Arora: +91 11 40828227

Metal + Metallurgy China 2014

Organiser: China Iron and Steel Association China Foundry

Association Chinese Mechanical Engineering Society Me

Venue: China International Exhibition Center, Beijing.

Web Site: www.mm-china.com

----------------------------------------------------------------------------------------------------------------------------- ---------------

15th Asian Ferro-alloys Conference

01 April 2014 - 03 April 2014 - Conrad Hotel, Hong Kong, Hong Kong

Metal Bulletin Events' 15th Asian Ferro-alloys Conference will still take place in Hong Kong. With over 600

delegates expected, the flagship Asian event is not only the most important forum to discuss the challenges and

opportunities facing the regional and global markets, but an excellent platform to reconnect with trading partners,

forge new business relationships and be updated on the latest industry information and trends.

------------------------------------------------------------------------------------------------------------------

Metal & Steel Saudi Arabia 2014

Organiser: Arabian German Exhibitions Co Ltd

Venue: Riyadh International Exhibition Centre, Riyadh, Saudi

Arabia

Website:www.metalsteelsaudi.com

Link:http://www.metalsteelsaudi.com

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STEEL NEWS

Indian steel prices to remain stable in April Falling international steel prices, drop in domestic iron ore prices and recent appreciation in rupee that made imports attractive may force steelmakers to either cut steel prices or keep prices unchanged in April. Steel manufacturers and distributors confirmed that after three consecutive price hikes since January, steel prices are unlikely to rise in April. A spokesperson from Essar Steel said that "The input cost continues to remain firm. The price levels in India are in line with global prices and in some cases lower than import parity prices. The demand is stable. Hence the prices will continue to remain at present levels." Mr RK Goyal MD of Kalyani Steels, too agreed that probability of steel prices remaining at current levels in April are high as demand continues to remain subdued. Another steel major having strong presence in southern and western India said that previous price increases were absorbed by the market but now the prices would remain stable. An analyst said “Steel demand was likely to remain subdued going forward. Even after election if stable government forms at center, it will not immediately translate in to investment. Real effect of new government will start reflecting only after September, thus no major investment is seen in next six months at least.” Steel prices across the globe, barring the US, have remained under pressure because of excess supply Source – DNA (www.steelguru.com)

CIL to hike coking coal prices by 10pct from April Coal India Limited is planning to increase coking coal prices by 10% from April 1st 2014. A senior company official said that “Though we have raised non coking coal price in the current year (2013 to 2014), we have not revised coking coal prices since February 2012. Coal India produces nearly 15 million tonnes of coking coal annually, mostly through its subsidiary Bharat Coking Coal Limited. Steel makers such as Steel Authority of India Limited and TATA Steel Limited among others, meet a part of their coking coal requirement from Coal India’s supplies. This financial year, Coal India has raised non coking coal prices twice. In May, it raised prices by around 5% across grades and across all subsidiaries and in December, it raised prices of coal at subsidiary Western Coalfields Ltd by 10%. The impact of the price hike, in terms of additional revenue will not be significant for the coal behemoth as coking coal comprises only around 3% of its total coal production, which is seen at 460 million tonnes in 2013 to 2014 (April-March). Source - Freepressjournal.in (www.coalguru.com)

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Bright future for steel industry : SAIL chief

Notwithstanding poor growth in steel demand this year, state-owned SAIL believes the future of the industry is

bright as India’s per capita consumption is low and Government is planning to increase infrastructure spending.

India’s steel demand grew by just 0.5 per cent to 53.78 million tonnes during the April-December period of the

current fiscal, impacted by economic slowdown. Though India’s per capota consumption has increased from 29 kg

in 2000 to 59 Kg in 2012-13. In rural areas home to around 70 per cent of the population per capita consumption is

approximately one-fifth of the national average at 12 Kg.

The future of the Indian steel industry is indeed very bright and there are several enablers which indicate this and

includes low per capita consumption and governments plan to hike infrastructure spending. Starting that

government plans to increase infrastructure spending from the current 5 persent GDP to 10 per cent by 2017.

India is committed to investing $ one trillion in infrastructure during XIIth Five Year plan. Taking 15 per cent as

steel component in the total investment, then it can generate additional demand worth $75 billion os steel in next

few years or $15 bilion worth of additional demandf of 18.75 million tonnes per annum

Besides, the National Manufacturing Policy envisages the share of manufacturing in GDP to increase from 14 per

cent in 2012-13 to 25 per cent by 2025 with manifold increase in steel intensify translating into finished-steel

consumption of 230-255 MTPa by 2025.

Indian steel industry has also grown at a hand some pace from less than 22 million tonnes (MT) in 2000 to about 81

MT in 2012-13 at CAGR of 11 per cent. While it achieved the forst 27 MT of production capacity in 50 years

between 1951-52 to 1999-2000, the next 10 years – from 2000-01 to 2009-10. the country proposes to achieve 300

MTPA capacity by 2025.

Steel firms get more time to obtain green clearances

New Delhi, March 9 : The government has decided to give firms, including JSPL and Tata Steel, more time to seek

clearances from environment ministry and furnish proof on the same to coal ministry by December 1, falling which

their mines would be de-allocated.

“Accordingly, you are advised to take necessary steps for obtaining FC (forest clearance) state II from the Ministry

of environment and forests (MoEF0) by November 30, 2014 and furnish the proof thereof to this ministry by

December 1, 2014 falling which coal blocks would be de-allocated without further notice, the coal ministry said in

letters to the firms. The decision was taken following the recommendations of an inter-ministerial group coal block

Source : PTI

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Steel sector may see temporary over-supply

NEW DELHI PTI – With around 50 per cent capacity increase in the offing, India’s steel industry is likely to face to

temporary over supply situation, SAIL Chairman C S Verma said. “Substantial capacity additions are lined up in

the next 1 to 0 years in the country taking the capacity from the current level of around 90 million tones per annum

(MTPA) to around 135 MTPA by 2015-16,” he said. The rise in production may lead to a “Temporary phase of

over-supply,” he said adding, this because “typically the increase in capacities is in spikes, whereas the increase in

consumption follows a relatively smoother trajectory.”

Almost all the leading steel producers in the country have been jacking up capacities, anticipating a boost in demand

with an estimated $ one trillion to e invested in the infrastructure space during the current Plan Period. On the other

hand, the demand has not been rising on the expected lines. During the April-February period of the current fiscal,

India’s steel consumption expanded by just 0.7 per cent to 67.253 million tones (MT) over the same period last

fiscal, mainly due to slow economic growth.

Typically steel consumption rises by 1.1 times of the GDP growth rate for an economy. It remained largely subdued

so far in the current fiscal considering India’s slow GDP growth. India’s economy grew below expectations at 4.7

per cent in October-December on falling output in the manufacturing sector. The country’s GDP had expanded 4.8

per cent in the July-September quarter and 4.4 per cent in April-June period Growth in the first nine months (April-

December) was at 4.6 per cent.

Increased capacity and subdued consumption might lead to more exports. In the first II months of the current fiscal.

India’s steel exports were up by 8.1 per cent at 5.045 MT. Imports, on the other hand, saw a 31.1 per cent decline

during the period.

Indian rupee ends fiscal on a high on euphoria over elections

The Indian rupee posted its biggest quarterly gain since the September quarter of 2012, streaking past the 60/USD

level, to touch an 8 month high as foreign investors grabbed Indian shares anticipating a conducive electoral

outcome.

The rupee ended Friday’s session and the financial year at 59.89/90 to the dollar, a smart 15% up from the all-time

low of 68.85/$ that it hit in late August last year.

The rupee has gained 3.2% since December 31st. Combined foreign flows into the bond and equity markets are in

the region of USD 9.3 billion.

While exporters would be disappointed since they would earn less in rupee terms, oil marketing companies will be

big gainers as will be corporates importing coal or machinery.

Companies with unhedged foreign exchange exposures also stand to benefit since they will mark these to market at a

higher rupee value. The currency is expected to rise further to 57-58/$ if foreign flows into the bond and equity

markets sustain, but give up some ground thereafter. Market players observe that chances that the pro business

opposition BJP would win a strong mandate at the general elections is prompting foreign funds to invest in India.

Several exit polls have also predicted a strong win for a BJP led coalition.

The optimism surrounding elections comes on the back of improving macroeconomic data and a general

improvement in global sentiment as well.

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Mr Manoj Rane, MD and head of global markets at BNP Paribas, said that “If we see an inflow of around USD 5

billion in the next month, the rupee could rise to 58 or 57/$. However, in the medium term, the rupee is likely to

settle in the 60-63/$ range once the euphoria over elections tapers.”

Source - www.nagalandpost.com

(www.steelguru.com)

Imported Scrap offers to India rose by USD 15/MT over strong currency and high offers in

global market.

Imported Scrap prices have risen in Indian market owing to strong Indian currency, which has appreciated around

3% in last few trading sessions and rising offers in the global market.

Sources tell SteelMint that current offers from Middle East are hovering in the range of USD 380-385/MT CFR

Mumbai based on quality & delivery, which has gone up by almost USD 15/MT from last month. Recently, a vessel

carrying 8 containers of HMS 1 from Oman is to be delivered to Nhava Sheva Mumbai next week. The deal is heard

to be settled at USD 383/MT CFR.

Indian importers are inclined towards Middle East offers. As per few market participants we talked, prompt delivery

from Middle East is one of the major reasons for frequent transactions. It takes maximum of 7-9 days to deliver the

material from Middle East to India. Currency fluctuation is also an important factor while trading internationally. An

importer based in Mumbai opined,

Source : http://www.steelmint.com/news/imported-scrap-offers-india-rise-strong-currency-21254

Chhattisgarh’s steel manufacturers will be charged by different Value Added Tax (VAT) in sales as per capital

expenditure in plant. For capital investment of more than INR 10 crore will be charged by 5%, whereas capital

expenditure of less than INR 10 crore will be charged by 3%.

As per the CG Budget announcement w.e.f. 1Apr 2014, the new VAT charges will be implemented

as per the industry categorization. The small scale (capital less than 1 crore) and medium scale

(capital less than 10 crore) steel industry will be charged by 3% VAT. However, large scale (capital

more than 10 crore but less than 100 crore) industry will be charged by 5% VAT. Similarly, CST 2%

will be applicable to large scale manufacturers, whereas small & medium scale steel industrialist will

be charged by 1%. Around 6 major TMT brands will fall under 5% VAT, whereas rest will be charged

by 3% VAT.

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“Its sad news for the steel industry as the same product (Re-bar) will be charged for two separate

taxes (as per the industry classification) by two separate plants. The industry as a whole doesn’t

support this law,” said a Re-bar manufacturer (medium scale), benefited by 2% rebate in VAT.

Particular Mftg > 10 crore Mftg < 10 crores Difference

Size/Rate Price Size/Rate Price

Brand Positioning Premium Commercial

Basic 12 mm 34,500 12 mm 33,800 700

Loading 115 34,615 115 33,915

Excise duty 12.36% 4,278 12.36% 4,192

VAT 5% 1,945 3% 1,143

Ex-plant including VAT 40,838 39,250 1,588

CST 2% 778 1% 381

Ex-plant including CST 39,671 38,488 1,183

Note: Only Reference Price

Source : www.steelmint.com