ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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STEEL-Murky Aftermath of Decontrol

Murky Aftermath of Decontrol S V Char ADMINISTERED prices, government has discovered, permits distortions and serves the interests of neither producers nor consumers. It is only middle men who scoop up market premiums who. thrive on administered prices. Administered prices in such a situation, moreover, could show peculiarities such as that billets were sold at Rs 3,700 whereas downstream products such as structural, angles, channels and others, were sold at Rs 3,200. In the aftermath of price decontrol, it is thus possible for producers to fund as much as Rs 700 per tonne under the Steel Development Fund, and even of this public sector units could deduct Rs 200 and private sector units Rs 100 towards cost escalations. Tine Steel Development Fund can now provide for replacement and modernisation. Decontrol can also encourage greater production, and reduce imports, of items such as: plates, structural pig iron, and railway materials, the administered prices of which fetched a low market value.

Experiments in Steel Pricing

after a 1.5 per cent increase in the base prices of all steel items way back on April 7, 1979. Prices were put up even en July 15, 1980 in the range of 1.21 per cent as in the case of cold rolled sheets to 37.12 per cent as in the case of light rolls (30 lbs). By and large, taking all JPC items together, the July 1980 increase was of a minor nature consequent upon the upward railway freight reclassification of pig iron as well as the increases in railway freight rates for all iron and steel materials.

STEEL-The Wrong Kind of Subsidy

STEEL The Wrong Kind of Subsidy S V Char THE Steel Development Fund (SDF) was begun in June 1978, when steel prices were revised upward by Rs 320 per tonne. Of the increase in price, Rs 100 constituted a surcharge on all steel items other than plates, structural, tin bars, and railway materials, specifically to be credited to the SDF. The 15 per cent mark-up again in April 1979, in the base prices of all the steel items, was also for the purpose of building up the SDF. The need for a fund of this kind was in fact felt ever since the Plant Modernisation and Development Fund (PM&DF) was wound up in March 1977. The PM&D Fund and similar funds preceding that were operated by crediting to them the difference between the retention price and the selling price. When the government gave up the retention price system itself in March 1977, the PM&D Fund lost the basis on which it could be computed. The retention price was the ex-works price. It included the cost of raw materials, operating charges, labour, overheads, depreciation, interest, as well as a return on the gross block.' Excise duty and railway freight were added to derive the selling price. In fact, however, the selling price included an additional margin over and above the excise duty, the railway freight, and at one time a surcharge (which' was abolished in 1964), Consequently, the difference between selling and retention prices did not all go to the government and the railways. After statutory control on steel prices of all categories was removed in October 1973, the actual realisations were relatively higher. So also were the amounts credited to the PM&DF.

Viability of Vizag Steel Plant

November 10, 1679 mittee.
These committees, which were dissolved after the fall of the United Front Government, were not the type of village committees of would-be beneficiaries. These committees, under the guidance of the .state government along with the intensive peasant movement, could take possession of about 7.0 lakhs of acres of surplus land and distribute about 4.0 lakhs of acres of land to the rural poor. Although the achievement was much below the expectation, no other state government could show such performance. The present Left Front government has already started 'Operation Barga'

Economics of Steel Technology in India

S V Char The policy implications of the necessary major criteria for choice of technology in steel making include autonomous growth of the iron and steel industry, with a heavy reliance on the integrated BF + LD units. Large investments cannot be avoided. Computations in this article show that, for India to attain its objectives in steel, the ratio of BF + LD to DR + EF capacity would have to be approximately 70:30, if not higher.

INDUSTRY-Steel Pricing and Distribution

Steel Pricing and Distribution S V Char EFFECTIVE April 7, 1979, Ministry of Steel and Mines has marked up the base prices of all steel items by 15 per cent This would be over and .above the development and import surcharges. Effective the same date, the government has also imposed a surcharge of Rs 100 per tonne on pig iron. The trice increases would also apply to quantities already held in the stockyards.

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