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Mineral policy will be consumer, investor friendly: Jitin Prasada

Mineral policy will be consumer, investor friendly: Jitin Prasada
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First Published: Tue, Nov 11 2008. 11 54 PM IST

Confident stand: Jitin Prasada says his party will win in all states. Indranil Bhoumik / Mint
Confident stand: Jitin Prasada says his party will win in all states. Indranil Bhoumik / Mint
Updated: Tue, Nov 11 2008. 11 54 PM IST
New Delhi: Minister of state for steel Jitin Prasada is a recent entrant to the Union council of ministers—he was inducted on 6 April 2008—but he says he has already been able to move towards the goals he had set for himself when he joined the government.
In an interview, Prasada said the government will soon come out with a mineral policy to make investments in the mining sector easier. And the global economic slowdown and its impact on the steel industry will not affect the expansion plans of state-run Steel Authority of India Ltd (SAIL), Prasada said.
Elected from Shahjahanpur in Uttar Pradesh, a state which sends the most lawmakers to Parliament and where his Congress party was once the dominant political force, Prasada had to work hard to retain the constituency of his late father Jitendra Prasad.
In the interview, Prasada also spoke about the policies and prospects of Congress party in the coming assembly elections in six states and the general elections due next year. Edited excerpts:
The government has withdrawn 15% export duty on steel. What is the logic?
The 15% export duty on products of steel was put (in place) at a time when we were facing a crisis in terms of availability within the country. And at that time, there was a huge demand in India and there was less production. That is why there was a need to discourage people from sending steel outside the country.
Now with the turnaround and lack of demand globally as well as within the country, it does make sense to protect the steel industry within the country where demand has fallen drastically, and we should do away with the 15% duty we had levied during the peak period of steel.
Many car companies including Maruti Suzuki India Ltd are into cost-pushing measures due to steel prices. What is your ministry doing about it?
Confident stand: Jitin Prasada says his party will win in all states. Indranil Bhoumik / Mint
Primarily it has to do with the automobile industry. Of course, the major component is steel. The steel they are using is cold rolled (CR) coils, which is primarily imported, because that much of quality is not available within the country. And those import agreements are done on a long-term basis. We have seen that between last October and October this year, there has been a 20% rise in the price of CR coils. And, I guess, that is one of the primary reasons why companies such as Maruti are raising prices. The input costs have gone up.
Steel companies are of the view that it will be tough to raise credit for expansion. Is the ministry trying to work out a mechanism with commercial banks in the country to ease this situation?
Not exactly. That proposal has not come from any quarter. Over the past one year, where the time has been good for the industry, PSUs (public sector units) such as SAIL have (managed) sufficient reserves that their expansion plan is not hit. They have enough funds for at least a year, I guess. As far as other companies (are concerned), I am not aware of any such move (for a mechanism with commercial banks).
Has there been any assurance from SAIL that it will not be affected by the crisis in the sector?
I guess they have enough resources to sustain their expansion plan at least for a year.
The credit crisis in the market has made people lose their confidence. Do you think lowering interest rates will ensure money flow inthe market?
Of course. That is what is happening. As far as the liquidity crunch is concerned—that is the primary concern—with steps that have been taken in terms of the CRR (cash reserve ratio) cut, etc., I think that would ensure sufficient availability of funds. It has already started showing results in stock market and it has gone down well with the industry.
Is there any understanding between the government and steel manufacturers that the prices will remain in line with global prices? Besides, one of the priorities you had set when you became minister was to make steel affordable.
Of course. As far as the prices go, the steel industry within India is totally a deregulated sector. We are not looking at clamping down and going ahead with those kind of restrictions where you are really regulating the prices. What we do is monitor the prices. We ensure that we remain investor-friendly, the consumers are protected and the industry is also (able to) sustain itself.
You had also said that you would like to take some steps to expedite the greenfield projects.
We are working at it. There have been few decisions. We would have a mineral policy (to remove bottlenecks impeding investments in the mining sector) which would be out.
A special purpose committee has been formed for it and certain groups have been put together. Because these clearances not only involve the steel ministry, but also ministries of environment, mining, state governments, there are lot of hurdles.
In order to have more cohesiveness and quicker decisions, there has been some coordination and a special purpose vehicle has been formed.
But the United Progressive Alliance (UPA) government’s attempts to finalize the mineral policy have been jeopardized by state governments. Many mineral-rich states have raised objections over the draft policy and the proposed amendments to the Mines and Mineral (Development and Regulation) Act, 1957.
The discussion period is still on and soon we would be able to come out with it. It would see the light of the day, and soon. It would be a concrete policy, consumer-friendly and investor-friendly.
Will it happen during the present government’s tenure?
Well. That’s what the aim is. Of course (it will).
Do you think the current market crisis will cost the ruling Congress party?
I do not think that is happening. Of course, the government is very concerned as to where the market is going... What is happening in the world has its repercussions on India. But we have confidence that the policies of the UPA government are pretty stable. Prime Minister (Manmohan Singh) met (on 3 November) a group of industrialists and he is very confident that we will continue the growth rate at 7-8%, which is very good at the kind of conditions that are there today. We are not looking at any large scale layoffs.
So the government is not worried about the job cuts?
Of course, the government is worried about it. The Prime Minister had a meeting (with industrialists) and he has come out categorically that there would not be any large-scale layoffs and that would be the priority and the industrial leaders have committed to the Prime Minister.
Manmohan Singh government’s USP was its economic reforms and the welfare measures it has taken. Do you think the money crisis will affect the programmes?
I do not think so. It is not that kind of a situation where you are looking at...that (cutting money for welfare funds) could be an emergency situation. Now we are looking at...the other way. NREGA (National Rural Employment Guarantee Act ) has Rs16,000 crore earmarked and next year we are looking at Rs26,000 crore. The cabinet has recently taken a decision on the right to education (which promises free and mandatory education for children between the ages of six and 14). That would also require a certain amount of funds.
Do you think that the glory the government claimed after the successful signing of the India-US nuclear deal has faded due to the global financial crisis?
Not exactly. They are two different watertight compartments. The global crisis is a global phenomenen in which India cannot be isolated even though we are much better off than other countries. In every aspect, because our fundamentals are very strong and growth prospects are there. As far as the nuclear deal is concerned, it is not about the glory, it is a commitment for best national interest. That is why the Congress government and UPA chairperson (Sonia Gandhi) stood by it. They believe that it was in the nation’s best interest and we took it forward. It’s not about votes, not about brownie points.
How far will inflation affect the Congress party’s prospects in the coming elections?
The impact would only be known when the results are out. As far as the prices go, half of people are very clear that there are unavoidable reasons... On the other hand, the Congress has been very concerned and focused that the common man is not affected that much. We ensured that the MSP (minimum support price) for rice and wheat has gone up to benefit the farmer. That was the need of the hour and we have focused on that.
Despite Rahul Gandhis intense efforts to revive the Congress in Uttar Pradesh, the party is still in a very poor position in the state. Has the Congress lost the state forever?
Nothing of that sort. Mr Gandhi has been working in all states, of course Uttar Pradesh is his own state. But he is trying to build youth organizations across the country. As far as UP goes, we are not looking at the short-term goals like many other parties, who have polarized the state on communal, castes lines just for the sake of votes.
Our stand is very clear that the Congress is looking for a long-term goal in UP where we are tying to revive the party on issues of development and secularism. That’s the agenda.
We are confident that one day the people will turn around and come back to the Congress fold and the Congress ideology rather than going in for the small-term or short-term gimmicks of caste politics and communal politics.
What are the Congress party’s prospects in Delhi, Rajasthan, Madhya Pradesh, Chhattisgarh, Mizoram and Jammu and Kashmir—which are going for polls in November-December?
All states, we will win.
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First Published: Tue, Nov 11 2008. 11 54 PM IST